President Takes Action to Lower Drug Costs for the Uninsured and Government Programs

July 31, 2020

President Trump signed four Executive Orders (EOs) aimed at lowering prescription drug costs and increasing Americans’ access to life-saving medications, including insulin. These EOs task the Department of Health and Human Services (HHS) with specific steps to support the Administration’s efforts to promote prescription drug importation, make prescription drug discounts/rebates available to consumers, and ensure the accessibility and affordability of critical drugs like insulin and injectable epinephrine. The EOs are intended to reduce costs for the uninsured and those participating in government-run healthcare programs like Medicare and Medicaid. The EOs do not appear to directly impact the prescription drug costs of employer sponsored group health plans.

Specifically, the EOs provide as follows:

• The first Order directs federally qualified health centers to pass along massive discounts on insulin and epinephrine received from drug companies to certain low-income Americans.
• The second Order will allow State plans for safe importation of certain drugs, authorize the re-importation of insulin products made in the United States, and create a pathway for widespread use of personal importation waivers at authorized pharmacies in the United States.
• The third Order will prohibit special deals between drug manufacturers and pharmacy benefit manager middlemen, ensuring patients directly benefit from available discounts at the pharmacy counter. This could, if enacted, impact group and employer based benefit plans.
• The fourth and final Order ensures that the United States pays the lowest price available in economically comparable countries for Medicare Part B drugs.

It remains to be seen when and if HHS will begin acting on these EOs and what effect they may ultimately have, as the EOs do not have the force of law, do not have effective dates, and do not set strict timelines for action by HHS. Also, shortly after issuance of the EOs, the President was scheduled to meet with pharmaceutical manufacturers to discuss the orders, but the meeting was cancelled after the executives declined the White House invitation in protest of the EOs. In any event, many health policy experts say these EOs will likely offer patients only minimal relief if they are ever implemented.

Most of the EOs don’t directly impact group and employer sponsored benefits plans at this time.

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