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Trump Issues Executive Orders to Lower Drug Costs



President Donald Trump Speaks at the Conservative Political Action Conference | Trump Issues Executive Orders to Lower Drug Costs | Featured

With public health services front and center amidst a persistent pandemic, President Trump took action to reduce drug costs and increase access. The president issued four executive orders, giving teeth to his promise to reduce drug prices during his first term. The move could reflect the president’s desire to shore up support among older voters, a demographic split between two candidates.

Four Executive Orders

Donald Trump issued four executive orders on Friday:

1. Ultimatum for Big Pharma

The president issued a one-month ultimatum for drugmakers to reduce their prices. Pharmaceutical companies have until August 24 to propose a comprehensive plan for price reduction. “The clock starts right now,” said Trump of the ultimatum.

If the pharmaceutical industry misses the deadline, the administration would slash prices that Medicare pays for drugs, down to the level that other country countries pay.

2. Eliminate Drug Rebates (Possible)

The president also seeks to eliminate the rebate and discount systems that exist between pharma companies and insurance providers. Critics of the system claim that it actually increases overall prices through greater complexity.

However, the order will only take effect if the Secretary of Health and Human Services confirms that the change won’t increase federal spending, premiums, or patient costs. For this reason, many are skeptical that it will ultimately be enforced.

3. Personal Importation

One executive order will allow “personal importation”, or importing drugs from other countries for personal use. Previously illegal, the allowance could have a massive impact on drug prices, raising competition in the US domestic drug market. Nearly all other countries have much lower drug prices in the US, though many countries also are subject to laxer safety measures.

4. Negotiated Discounts for Emergency Drugs

The fourth and most substantial executive order will lower the prices of essential drugs: EpiPens and insulin. EpiPens deliver a shot of adrenaline to the heart, and are often used in the case of fatal allergic reactions.

November in Sight

The effects of the executive orders on real drug prices are difficult to predict. Two of the executive orders are pending further action or investigation. If pharmaceutical companies do not meet the deadline for an alternative plan (unlikely), then the first executive order will have a dramatic impact on drug prices. If they deadline is met, the effect will depend on how substantial the industry’s proposed plan is, as well as if it gets accepted.

Eliminating drug rebates is also incumbent on a few factors, and could likely be negated. The timing of the executive orders, however, could have a major impact on the US over the next four years.

Many interpret the executive orders as a way to gain support before the election, now less than four months away. Older voters are relatively torn between the two presidents. The Trump Administration could potentially alienate older voters by focusing on Biden’s age and alleged cognitive decline. Older voters, however, are extremely concerned by a sense of lawlessness in the United States, as well as the destruction of US statues and other cultural landmarks. These issues could push them toward Trump.

Drug prices are a major concern for elderly Americans. Prices continue to soar while this group’s spending power has not. The Trump Administration would be wise to make serious headway on this issue before the elections.

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