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Executive Orders Show Dems Must Work with GOP to Rein in Overpriced Drugs

July 24, 2020

The Administration has announced a series of Executive Orders related to prescription drugs.

What this means: Both the Administration and congressional Republicans have championed cracking down on overpriced drugs. Blocked from bipartisan progress by Democratic leadership in the House and the Senate, the Administration moved forward today, issuing three executive orders and announcing a fourth related to an International Pricing Index (IPI) system: 

  • International Price Indexing (or “Most Favored Nation”): Beginning August 24, unless an alternative reform can be advanced, Medicare reimbursement of certain drugs— primarily those administered in a physician’s office—will be tied to the best price of the drug that can be found internationally. 
  • Three importation programsFinalize the state and tribal importation rule, allowing for personal importation of drugs, and allowing for the reimportation of insulin from Canada 
  • Direct Discount Requirements on Insulin or Epi pensRequire Federally Qualified Health Centers to pass on discounts received through the 340B discount drug program directly to Americans who purchase insulin or epi pens at such facilities.
  • Direct Rebate RequirementsRequires rebates negotiated between Pharmacy Benefit Managers on behalf of Medicare Part D plans and pharmaceutical companies to pass through to consumers at the pharmacy counter when purchasing drugs rather than aggregated across the plan and passed through in the form of premium reduction as happens today.

A Long-Term Solution Protects Cures and Takes on Overpriced Drugs 

  • Fewer new medicines are available when governments set the price: Today, Americans have access to all 270 global new medicines that have been discovered from 2011-2018. In Canada and France, patients can’t access half these cures. In Australia, even if a patient can get a medicine, she has to wait over a year and a half longer than an American.
  • We can’t lose our leadership in medical breakthroughs: In the middle of this pandemic, American scientists are developing therapeutics and vaccines, and despite its flaws, Medicare is supporting that effort. 57 percent of the world’s breakthrough drugs are in development in the United States. Over the same time period, the U.S. produced 111 new drugs. France produced only 11. 

H.R. 19 Has Support from President Trump and Includes Policies Democrats Want.

  • More Cures vs. Fewer Cures: Americans should have affordable drugs without Washington bureaucrats stepping in and blocking cures. 
  • Affordability and Predictability: Caps out-of-pocket costs and spreads out costs over the year for seniors.
  • Transparency: Makes information about drug costs available in the doctor’s office before a prescription is written so a patient knows the cost and so doctors can prescribe the medicine that is best and most affordable for them before going to the pharmacy.
  • More Choice: Brings more generic and biosimilar competition to the marketplace faster. 
  • Stops Foreign Free-riders: Stops subsidizing other developed countries’ prescription drugs through stronger trade agreements with real enforcement mechanisms.
  • Achievable: H.R. 19 is bipartisan and contains over 40 bipartisan policies, while Pelosi’s drug scheme has been dead on arrival in the Senate.
  • Lowers the price of insulin: Reduces coststhrough caps, regulatory streamlining, incentives to lower prices at the sales counter, sharing savings with seniors, expanding insurance coverage, and transparency.

In fact, four policies from H.R. 19 have been signed into law already—four more than anything contained in Pelosi’s scheme:

  • Repeal of Obamacare’s over-the-counter “Medicine Cabinet” tax
  • Protecting access to biological products 
  • Streamlining transition of biological products

Democrats’ Partisan Unconstitutional Proposal Kills Cures

  • Fewer Cures Will Be Available for Americans Hoping for New Medicines: Estimates range from 15 to 100 fewer cures could be developed because of this bill, when even today fewer than 10 percent of drugs get approved by regulators.
  • Not Negotiation but Coercion: Setting a maximum price for the drug. If a manufacturer refuses to “negotiate,” then the manufacturer can be punished with taxes up to 95 percent. This is a penalty so large, it will force the manufacturer to take Washington bureaucrats’ price or stop selling the drug in America.
  • It’s Unconstitutional: TheCongressional Research Service cautions that H.R. 3’s provisions limiting drug prices could violate the Fifth Amendment’s takings clause as well as the Eighth Amendment’s excessive fines clause.