On May 12 the Trump administration announced a revival of the “Most Favored Nation” (MFN) drug pricing executive order (EO) similar to one it unsuccessfully tried to implement in President Trump’s first term. Apart from including Part D drugs and some more aggressive language than last time, administration officials did not immediately say how this attempt would achieve a different result.
The presidential executive order has not been released at press time. At a related press conference, Trump claimed drug prices would be reduced by as much as 90% by the order.
On May 12 administration spokesmen told reporters that “the United States has less than 5% of the world's population, but accounts for roughly three-quarters of global pharmaceutical profits. The president has made clear that this status quo is unacceptable.”
They reported that under the terms of the EO the United States Trade Representative and the U.S. Department of Commerce will be “directed to take all appropriate action against unreasonable and discriminatory policies in foreign countries that suppress drug prices abroad,” and that the Secretary of Health and Human Services “will also be directed to facilitate where appropriately, direct to consumer sales at most favored nation prices. And within 30 days, the Secretary of Health and Human Services will set clear targets for price reductions across all markets in the United States.”
This, the spokesmen said, would “open a round of negotiation between [HHS] and industry. And if adequate progress is not made towards these price reduction targets, the Secretary of Health and Human Services will impose most favored nation pricing via rulemaking.”
The spokesmen said the U.S. Food and Drug Administration (FDA) “would consider expanding importation from other developed nations beyond just Canada. And the Department of Justice and Federal Trade Commission [FTC] will aggressively enforce against anti-competitive actions that keep prices high in the United States. And the Department of Commerce will consider export restrictions that fuel and enable low pricing abroad.”
The spokesmen did not say what drugs the administration is looking at, though they did say that “obviously there will be a particular focus on where the disparities between the prices that the United States gets and foreign prices are widest.”
The spokesmen also mentioned that among the anti-competitive actions the FTC would investigate would be misuse of “patents, whether it be through pay-for-delay, [or] whether it be Orange Book manipulation.” (The former refers to what
FTC has called attempts to “sidestep competition by offering patent settlements that pay generic companies not to bring lower-cost alternatives to market”; the latter
refers to new patents submitted by pharmas related to previously FDA-approved drugs.)
The spokesmen were less forthcoming as to how the pharmaceutical companies could be made to comply with the president’s wishes. Several pharmaceutical and related groups were able to block the previous Trump MFN plan in court, and the Biden administration withdrew the rulemaking (
PBN 8/30/21).
The administration had issued an executive order on drug pricing on April 15 that claimed credit for the Biden-era insulin price caps, attacked the Inflation Reduction Act Medicare Prescription Drug Negotiation Program, and ordered the U.S. Director of the Office of Management and Budget and others to “provide recommendations” and the Secretary of HHS to “work with the Congress to modify the Medicare Drug Price Negotiation Program,” among other targets.
This is a developing story. Watch Part B News for more details.