Section 4 of the President’s Executive Order (EO) on drug pricing aims to reduce the high-cost drugs for seniors through the development and implementation of a payment model. It is very light on details; basically a title and one run-on sentence. So wide in scope you could drive a truck through it, but let’s pull it apart.
Should we ignore that it refers to seniors, completely ignoring those who qualify for Medicare because they are disabled? I know it is rich to have me point out errors after my last newsletter when the wrong version went out, but c’mon. It is also awkward the way it says “those not subject to the Medicare Drug Price Negotiation Program” so, presumably, it includes all Medicare drugs. Okay, moving on.
The timeline, 1 year, for “appropriate steps” towards development and implementation of the model is the longest timeline in the EO. The payment model is to look for “better value for high-cost prescription drugs and biological products.” This could be lots of things – moving towards value-based payment based on comparative effectiveness, etc., but my money is that this is actually about international reference pricing. The Administration likes to use populist messaging and, the fact is, most Americans can get behind the idea that the United States shouldn’t pay more for drugs than other countries. The nuances of why we do are more complicated than can fit into a Tik Tok or tweet and it just gets lost.
How do you explain that drug pricing is not one thing, one price? That manufacturers could set prices higher abroad and just rebate the difference back to countries? How do you explain that other countries do not necessarily have the same values and access that we do? The United Kingdom is willing to say no to drug coverage and we just typically aren’t. Culturally we want what we want.
But I expect most favored nation proposal from President Trump’s first term will come back around as a proposal and it is something everyone should become familiar with (whether as a refresh or for the first time.)
