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Analysis

Avalere Health Analyzes Trump Drug Pricing Executive Orders

By Jack O'Brien  
   July 27, 2020

President Trump is scheduled to meet with pharmaceutical executives about the "most favored nation model" order on Tuesday.

Avalere Health released an analysis Sunday of four executive orders on prescription drug prices released by President Donald Trump late last week.

The Washington, D.C.-based consulting firm broke down the three orders signed by Trump in a ceremony Friday, as well as one order that was announced but isn't expected to be signed until late August.

Related: President Trump Signs 4 Drug Pricing Executive Orders

As part of the executive orders, federal qualified community health centers (FQHC) will now be required to make insulin and Epipen available to patients at the 340B Discount Drug Pricing Program price and states will be allowed to import prescription drugs from Canada and other countries.

The two remaining executive orders will require pharmacy benefit managers (PBM) to pass rebate discounts through to patients and will also implement the international pricing index (IPI) model to "end global freeloading" by requiring Medicare to purchase prescription drugs at the same prices paid by other developed nations.

Trump is scheduled to meet with pharmaceutical executives about the "most favored nation model" order on Tuesday. He said that if talks are successful, the administration might not have to implement the policy by August 24.

Related: Trump Has Blessed States' Exploration Of Importing Drugs. Will It Catch On?

Below are Avalere's insights into the four drug pricing executive actions:

  1. 340B insulin and Epipens:

    "While low-income and uninsured patients who need insulin may now be able to access their medicines at more affordable prices, the policy is limited," Chris Sloan, associate principal at Avalere, said. "To receive the lower prices, patients will need to visit a federally qualified health center, have incomes below a threshold, and prove they have high cost sharing requirements. Many of the exact eligibility requirements are still to be determined."

  2. Legal drug importation:

    "Importation may allow some states and wholesalers to access drugs at lower prices,” Chad Brooker, associate principal at Avalere, said. "However, there remains significant uncertainty over the level of interest in these new flexibilities, as well as safety and operational aspects."
     
  3. Eliminating Anti-Kickback Statute protections for rebates:

    "While there are unanswered process questions related to how rulemaking would be completed, the President's Executive Order makes clear the Administration is once again focused on fundamentally reshaping the current system of manufacturer rebates in the U.S.," Miryam Frieder, practice director at Avalere, said. "Given the requirement that premiums not increase as a result of the proposal, now is the time for stakeholders to engage with their preferred approaches."
     
  4. IPI / "most favored nation" proposal

    "Further details are crucial to assess the impact of the President's Part B proposal, especially at a time when the pandemic has already created financial volatility for providers and hindered access to physician-administered drugs," Lance Grady, practice director at Avalere, said. "The next month will be a time to assess a spectrum of potential approaches to lowering costs for Medicare beneficiaries."
     

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: Washington, D.C., January 4, 2019: President Donald Trump, speaks to the media in the Rose Garden at the White House after meeting with Democrats to discuss the partial government shutdown. (Michael Candelori / Shutterstock.com)


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