As He Woos Drugmakers on Virus, Trump Demands Drug Price Controls

WASHINGTON — President Trump signed a slate of executive orders on Friday targeting the high price of prescription drugs, including a still tentative plan to tie the price that Medicare pays for some drugs to the low prices that foreign countries pay.

The orders, which alone cannot change policy, recall pledges Mr. Trump made as far back as the 2016 campaign to tackle prescription drug costs, even if it means beating back opposition from the pharmaceutical industry and his own political party.

But this announcement, staged in front of a mock pharmacy, with blue bins full of white pill bottles, comes at a delicate time. Mr. Trump has placed billions of dollars in bets that giant drugmakers like Pfizer, AstraZeneca and Johnson & Johnson will deliver coronavirus treatments and vaccines in time to bolster his faltering re-election campaign. He needs those companies to produce and to participate in his celebrations of their achievements, even as he is attacking them over the price of their other products.

Mr. Trump may have nodded to that sensitivity when he said he would delay enforcement of the most aggressive of his proposed policies until after a meeting with pharmaceutical executives scheduled for Tuesday at the White House, giving them until Aug. 24 to “come up with something” before moving forward.

Stephen J. Ubl, the president and chief executive of the Pharmaceutical Research and Manufacturers of America, the main trade group for the industry, noted Mr. Trump’s dilemma.

“In the middle of a global pandemic, when nearly 145,000 Americans have lost their lives and millions of others have suffered untold economic hardships, this administration has decided to pursue a radical and dangerous policy to set prices based on rates paid in countries that he has labeled as socialist,” Mr. Ubl said in a statement.

The centerpiece of Mr. Trump’s event was a vague proposal that could tie the price that Medicare pays for drugs administered by doctors to prices negotiated by foreign governments. The White House released no details about how the policy would be devised. The president has called for such a system since 2018, railing against drug companies for ripping off Americans.

“Under our ridiculous system, which has been broken for decades, we aren’t even allowed to negotiate the price of drugs. Can you believe it?” he said on Friday, describing the Medicare prescription drug law passed in 2003 by a Republican Congress during the George W. Bush administration.

But the earlier proposal has sputtered in the face of resistance from the pharmaceutical industry and Republican lawmakers, and infighting among federal health officials. Conservative critics of the index have described it as a form of price fixing.

In a news briefing after the signing ceremony, Alex M. Azar II, the health secretary, said the executive orders signaled that arguments in the administration about how to proceed were now over. He declined to describe a regulatory plan for enacting the orders.

“What the president did today is through executive order made clear that these are the policies of his administration,” Mr. Azar said. “These will happen. He has ordered them to happen. Debate is over.”

The index order, which the White House did not release with the other three orders, reflects the president’s own frustrations that the United States consistently pays higher prices for drugs than peer countries. Humira, for instance, a heavily advertised arthritis drug, cost three times as much in the United States as in Switzerland in 2018.

It also comes just days after the Trump administration signed a $1.95 billion contract with Pfizer as part of its crash vaccine development program, called Operation Warp Speed.

Populist outrage over the rising cost of prescription drugs has been a leading campaign issue for Republicans and Democrats alike, who before the pandemic were inundated with questions about them at town hall events. Consumers have increasingly been exposed to the rising price of drugs as insurers have imposed high deductibles and required people to pay a percentage of a drug’s list price.

If enacted, the previously proposed policy would establish a five-year pilot program for assigning prices to a limited set of drugs administered by doctors in their offices — such as chemotherapy or rheumatology treatments — and would not affect prices for drugs bought at retail pharmacies. The Department of Health and Human Services is authorized to undertake such experiments by a provision of the Affordable Care Act, the health law that the Trump administration is seeking to overturn in court.

But it must still begin the experiments through formal rule-making. A more expansive program to control Medicare drug prices would most likely require legislation, since, as Mr. Trump noted, federal law prohibits the government from directly negotiating over the prices of retail pharmacy drugs.

Mr. Trump’s executive orders may have more symbolic meaning than any kind of immediate practical consequence. A regulation to enforce such a rule has been awaiting approval from the White House budget office for months and could give the policy the force of law if completed.

Mr. Azar said Friday that his department was still determining how it would comply with the executive order, a suggestion that his office might begin the process again.

Pharmaceutical groups also could sue, meaning that enforcement of the rule may not arrive until well after the election, if ever.

With his poll numbers sagging before the election, Mr. Trump has explicitly tied the development of vaccines and therapeutics to his re-election efforts, writing on Twitter last week that his 2020 race “should be a lot easier as our poll numbers are rising fast, the economy is getting better, vaccines and therapeutics will soon be on the way.”

On Monday, Mr. Trump will travel to North Carolina to tour a business working on a coronavirus vaccine, putting him back in a position to laud the work of the pharmaceutical industry he attacked on Friday.

The federal government’s nearly $2 billion contract with Pfizer for 100 million doses of the company’s coronavirus vaccine was announced weeks after the unveiling of a $1.6 billion deal with the Maryland company Novavax to expedite the development of its coronavirus vaccine.

Another order Mr. Trump signed Friday would revive a White House proposal from late 2019 that would allow certain drugs to be imported from Canada, and expand the list of drugs to include insulin. Another would require the provision of discounted insulin and EpiPens by federally qualified community health centers, clinics that treat low-income patients and are able to buy drugs at a discount.

A fourth asks the Department of Health and Human Services to finish rules removing the legal protections for rebates paid by drug makers to intermediaries known as pharmacy benefit managers and requiring those discounts to be passed along to Medicare consumers at the pharmacy counter. The plan was proposed in January 2019 and then withdrawn last summer after fights between health officials.

Under the new executive order, the rebates could not be passed along to consumers unless the health secretary confirms that the policy would not lead to increased federal spending or cause premiums to go up.

But while the Trump administration has said the plan could save money for seniors with high drug costs, the Congressional Budget Office had estimated that the previously proposed rule would cost the federal government $177 billion over 10 years, and would also raise drug-plan premiums. The rebate proposal has been strongly backed by the pharmaceutical industry, which has sought to blame pharmacy benefit managers for high drug prices.

The president has long railed against what he describes as “global freeloading” — how other countries negotiate far lower prices for drugs than what pharmaceutical companies charge in the United States. At the signing ceremony, he described some countries with lower drug prices as socialist. “We’re paying to reduce drug prices in a socialist country,” he said. How does that work?” Yet the international pricing index in effect allows him to outsource pricing decisions to those countries, since it would rely on price determinations made elsewhere rather than having the American government directly determine preferred prices. If prices in those countries went up, it would presumably drive up prices in the United States, as well.

Congress has also been considering strategies to reduce the cost of pharmaceuticals in the United States. A bill passed last year by the House also includes an international index for setting price ceilings for up to 250 common drugs, though that proposal would apply not just to drugs administered by doctors but also to drugs that patients buy from retail pharmacies. That bill has not been taken up by the Senate. A separate Senate bill that caps out-of-pocket spending in Medicare’s prescription drug program, and limits drug price increases, has failed to advance to a floor vote.

Senator Charles E. Grassley of Iowa, the chairman of the Senate Finance Committee and an author of the Senate bill, sounded optimistic that the executive orders might revitalize the legislative effort.

“For those who don’t like these executive actions, there’s time to get to the table and back a legislative solution,” he said in a written statement.

Margot Sanger-Katz and Noah Weiland reported from Washington, and Katie Thomas from Chicago.


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