Trump Moves Ahead With Drug Import Plan

President Trump signed 4 executive orders that would lower prices of prescriptions medications including insulin products and cancer medicines.
Skylar Jeremias
July 24, 2020
President Trump signed 4 executive orders with the aim of lowering prices for prescription drugs. These include a controversial attempt to import drugs from other countries with lower drug prices; however, biologics, which include biosimilars, would not be among drugs that could be imported, according to HHS Secretary Alex Azar, who spoke in a press briefing following the signing ceremony. Insulin could be imported under the plan.

“The 4 orders I’m signing today will completely restructure the prescription drug market in terms of pricing and everything else to make these medications affordable and accessible for all Americans,” said the president during the event.

Imports from Canada would be a part of the plan; however, Canadian officials have expressed opposition to such an arrangement because by volume their drug market is very small compared with the United States and demand from US consumers could have a huge effect on drug availability and pricing in Canada.

States, wholesalers, and pharmacies would be among those allowed to import FDA-approved pharmaceutical drugs.

Insulin Import Plan

Under the plan announced by Trump, insulins that are manufactured in the United States and sold in Canada for less money would be repurchased at those lower prices from Canada and re-imported to the United States. Further, individual drug consumers in the United States could participate in plans to purchase drugs from other lower price countries.

According to Azar and other officials who spoke at the press briefing, including Seema Verma, CMS administrator, US pharma companies would be presented with Trump’s policy on drug pricing and would have until August 24 to offer an equivalent plan for accomplishing lower prices.

Among Trump’s newly signed executive orders is a directive for CMS to set drug prices for Medicare using the lowest drug price among other economically advanced countries for certain drugs that are administered in a physician office, including cancer medications.

This would apply mostly to drugs under Medicare Part B, which pays for outpatient care.

Another order would require hospitals participating in the 340B Drug Pricing Program to pass the discounts they receive from drug companies directly to their patients. The 340B program enables hospitals to purchase outpatient drugs at deep discounts from drug companies. The hospitals are allowed to bill payers for the full, nondiscounted drug price, and they have typically been allowed to use those savings as they like. In many cases, these savings do not get passed on to patients, critics including federal health officials have contended.

Trump said his drug policies are designed to ensure that rebates drug makers pay to middlemen, such as benefits managers and payers, get passed directly to patients when they buy a medication.

“The drug companies pay $150 billion in undisclosed kickbacks to middlement to get formulary status,” Azar said. “This...would require that those kickbacks be passed through to our seniors when they walk into the pharmacy." He said this would amount to roughly $30 billion in annual savings to seniors who buy their drugs at the pharmacy.

Prior to Trump’s announcement, the Biosimilars Forum, which includes 9 of the largest biosimilars producers, called on the Trump administration to deliver savings by promoting competition, increasing access to biosimilars, and encouraging physicians to prescribe lower-cost medications, in addition to signing executive orders.

“President Trump can unlock billions in savings for US seniors, patients, and Medicare Part B by helping seniors access biosimilars, the next generation of lower-cost drugs,” said Juliana Reed, president of the Biosimilars Forum, in a statement.

“A shared savings program for biosimilars, through CMMI [The Center for Medicare & Medicaid Innovation], is a straightforward solution to properly align incentives in a way that will encourage competition and drive down drug costs throughout the health care system,” she continued.

Currently, 2 bills introduced in both the Senate and House of Representatives would, if enacted, implement a shared savings model for biosimilars through CMMI and encourage the use of biosimilars to lower drug spending under Medicare Part B.

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