Initial take at 3:30 today … which could change as I learn more…

The foundational premise of the President’s new Executive Order (EO) is that the United States should pay less for drug and other countries should pay more; there should be an equalization. The Administration will take steps to work with foreign countries and pharmaceutical manufacturers should offer American consumers a “most-favored-nation” low price and, if this doesn’t happen, the Administration will take more aggressive action.

I’d like to pause and tell a quick story. I have two teenagers. One will generally do what I ask, some grumbling, but will do it. And then there is the other one. He wants to know why, what if, when. It drives my husband, a very compliant son himself, crazy. I say all of this because this EO asks for compliance but has very little definition of what it is really looking for and what really happens if no one takes any action. I have one son that would read it and start planning and one that would say “I’m not doing that.”

Step 1 (Section 3) of the EO calls for the Secretary of Commerce to take action to ensure foreign countries aren’t unreasonable or discriminatory (what does that mean here?) or by paying below fair market value (defined by what – isn’t fair market value what they are willing to pay for the access they have?). How are they going to “take action” – what does that mean? For what drugs?

Step 2 has the Department of Health and Human Services (HHS) tell pharmaceutical manufacturers what most favored nation (MFN) pricing is (Section 5). Then HHS should facilitate direct-to-consumer purchasing programs for Americans at that MFN price (Section 4). There are so many gaps here that I don’t know where to start: What is the calculation of MFN? What countries does it include? What price does it compare it to? When it comes to this facilitation — Is this a cash price without insurance? What if someone has insurance? Is it a coupon? Does this replace patient assistance? Who is distributing the drug?

Step 3 if significant progress (undefined) is not delivered, then HHS will do a rulemaking to impose MFN pricing (no details on what that would be), importation may be allowed (it has been since 2003, but no Secretary has certified it for anywhere but Canada) and other actions might be taken. Again, all vague.

I am not a lawyer, but my hunch is that there isn’t the authority to do these things although that might not stop them from starting. There isn’t a lot to start doing work with, but it makes sense for pharma companies to at least start to think of these situations as what ifs and start planning accordingly. The swirl will be real and make for lots of meetings and work until it takes more shape. And, at that point, “I prefer not” can at least be an informed decision.