Trump signs executive orders on drug pricing, resurrect rules on rebates, importation

President Trump is expected to sign four sweeping executive orders intended to lower drug prices and resurrect measures to constrict Medicare rebates, tie prices for certain Medicare drugs to overseas prices, lower insulin prices and allow the importation of drugs from Canada.

Trump touted the executive orders during an event on Friday, highlighting measures such as the drug rebate rule that his own administration previously scuttled.

He also proposed a measure similar to an international price index that was proposed by HHS in 2018  but never became a federal rule. The proposal would tie prices for certain Medicare Part B drugs to an average paid by countries overseas, which get the same drugs at a lower price thanks to single-payer healthcare programs.

"We’re finally going to use that incredible power to achieve a fair and lower price for everybody,” he said Friday.

Trump said that his administration plans to meet with drug companies next week and depending on those negotiations, then he could drop the international drug index order. The companies have until Aug. 24 at noon or the index changes kick in.

Health and Human Services Secretary Alex Azar told reporters Friday that if the drug companies don't come forward with a comprehensive plan to address pricing concerns then the administration will move forward with the rule. But he declined to give a timetable on when a proposed rule would be released or how else the agency would move forward. 

"We will be discussing at a later date the procedural vehicles for how that would happen," he said. 

Trump did not mention a similar parley for pharmacy benefit managers that construct Medicare Part D drug rebates.

The orders touch on earlier proposals that have not gone anywhere in Trump’s administration.

Azar said that the order was meant to show the seriousness of the administration on tackling drug prices. 

"What the president did today is make clear these are the policies of his administration. These will happen. He ordered them to happen," he told reporters, declining to elaborate on timing.

The Trump administration released in 2018 a rule targeting Medicare Part D rebates. The rule would have eliminated the safe harbor for rebates that drug makers offer to PBMs and Part D plans from federal anti-kickback laws and instead create a new safe harbor for point-of-sale discounts.

But the rule was scuttled after intense lobbying from the insurance and PBM industry and amid concerns from the White House over whether it would raise premiums for seniors.

The executive order calls on HHS to revive the rule. The one major change is that it also calls on HHS to confirm that the rebate rule won't increase federal spending or hike Medicare Part D premiums on seniors. 

The IPI model was proposed back in 2018 as a notice of advance rulemaking, but it never was issued as a proposed rule after vociferous opposition from the pharmaceutical industry and even opposition among congressional Republicans who saw it as a socialist price cap.

The model would tie the prices for certain Medicare Part B drugs to the average paid by several countries such as Germany and Japan.

The administration has also been working with states such as Florida on a method to enable importation of cheaper Canadian drugs into the U.S.

Last year HHS and the Food and Drug Administration made several moves towards importation. The agency made a notice of proposed rulemaking to create a pilot project that allows certain states, wholesalers and pharmacies to import drugs from Canada.

The project would be limited to certain drugs due to a restriction in federal law, which would mean insulin wasn’t included.

The FDA also would put out guidance to manufacturers of FDA-approved drugs on how they can offer a lower price than what their current distribution contracts require in order to compete with the imported drug price.

The administration released a proposed rule outlining the pilot project back in December.

The executive order would also grant waivers for consumers to personally import drugs from Canada. Currently personal re-importation is illegal but the FDA traditionally turns a blind eye to it. 

However, the agency has previously been concerned about safety as it cannot verify that drugs re-imported from Canada are safe or effective. 

Canada also has vehemently pushed back on any importation into the U.S. over fears that its supplies could be in jeopardy since the U.S. is a much larger market.

Another executive order focuses on insulin prices, which was the focal point of a payment model launched by the Centers for Medicare & Medicaid Services earlier this year.

The executive order would ensure 1,000 community health centers would get insulin at a discounted rate under the controversial 340B drug discount program, which requires drug companies to give discounts to safety net hospitals in exchange for Medicaid participation. The order also applies to certain types of injectable epinephrine.

The health centers would be required to pass the discounts along to patients to get insulin, which has ballooned in price over the past decade, at a lower rate.