Skip to comments.Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen
Posted on 07/25/2020 7:00:32 AM PDT by DannyTN
By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:
Section 1. Purpose. One of the reasons pharmaceutical drug prices in the United States are so high is because of the complex mix of payers and negotiators that often separates the consumer from the manufacturer in the drug-purchasing process. The result is that the prices patients see at the point-of-sale do not reflect the prices that the patients insurance companies, and middlemen hired by the insurance companies, actually pay for drugs. Instead, these middlemen health plan sponsors and pharmacy benefit managers (PBMs) negotiate significant discounts off of the list prices, sometimes up to 50 percent of the cost of the drug. Medicare patients, whose cost sharing is typically based on list prices, pay more than they should for drugs while the middlemen collect large rebate checks. These rebates are the functional equivalent of kickbacks, and erode savings that could otherwise go to the Medicare patients taking those drugs. Yet currently, Federal regulations create a safe harbor for such discounts and preclude treating them as kickbacks under the law.
Fixing this problem could save Medicare patients billions of dollars. The Office of the Inspector General at the Department of Health and Human Services has found that patients in the catastrophic phase of the Medicare Part D program saw their out-of-pocket costs for high-price drugs increase by 47 percent from 2010 to 2015, from $175 per month to $257 per month. Narrowing the safe harbor for these discounts under the anti-kickback statute will allow tens of billions in dollars of rebates on prescription drugs in the Medicare Part D program to go directly to patients, saving many patients hundreds or thousands of dollars per year at the pharmacy counter.
Sec. 2. Policy. It is the policy of the United States that discounts offered on prescription drugs should be passed on to patients.
Sec. 3. Directing Drug Rebates to Patients Instead of Middlemen. The Secretary of Health and Human Services shall complete the rulemaking process he commenced seeking to:
(a) exclude from safe harbor protections under the anti-kickback statute, section 1128B(b) of the Social Security Act, 42 U.S.C. 1320a7b, certain retrospective reductions in price that are not applied at the point-of-sale or other remuneration that drug manufacturers provide to health plan sponsors, pharmacies, or PBMs in operating the Medicare Part D program; and
(b) establish new safe harbors that would permit health plan sponsors, pharmacies, and PBMs to apply discounts at the patients point-of-sale in order to lower the patients out-of-pocket costs, and that would permit the use of certain bona fide PBM service fees.
Sec. 4. Protecting Low Premiums. Prior to taking action under section 3 of this order, the Secretary of Health and Human Services shall confirm and make public such confirmation that the action is not projected to increase Federal spending, Medicare beneficiary premiums, or patients total out-of-pocket costs.
Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department or agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
DONALD J. TRUMP
THE WHITE HOUSE, July 24, 2020.
THANK YOU PRESIDENT TRUMP FOR YOUR WONDERFUL LEADERSHIP...................
I think he is taking advantage of the DOCA ruling.
Scotus upheld Obama’s legislating by executive order. So Trump is taking full advantage.
This will get challenged. But SCOTUS is going to have a really hard time ruling against these common sense reforms. Especially given that they supported Obama unlawful DOCA reforms.
Don’t worry. Something will crawl out of John Robert’s ass and he’ll reverse his ruling.
Other countries medicines were being subsidized by the USA taxpayers. Now those socialist countries will to lower their medical costs will let more people die by denying them medical care like medicine. Some 130,000 are killed each year in England alone already. See Liverpool care pathway
Top doctor’s chilling claim: The NHS kills off 130,000 elderly patients every year
Hospitals bribed to put patients on pathway to death: Cash incentive for NHS trusts that meet targets on Liverpool Care Pathway
This doesn't change that.
SCOTUS has no problem ruling against common sense positions. They’ll cite some procedural ‘misstep.’
DoodleDawg: This doesn't change that.
Also, I expect that a $50 prescription will now cost $49.95.
Prices are also high because the USA pays for research and development.
OBAMACARE DOESN’T ALLOW MEDICARE TO NEGOTIATE PRICES!
WE are Medicare/Tricare Life, nothing will lower the prices for us doctors will fight it as they deem they are underpaid and have to wait weeks to be paid. Nexium removed from Formalulary, OTC is CRAP. 2nd Barrett’s Esophagus Pre-Cancer spot since, other 3 breaks me out in hives. Just got stuck on HUMALOG INSULIN, 4 PILL FLUNK. $375 FOR 39 DAYS; FULL PRICE. SCRIPT 30 days;; Nexium over $1,000, no way the OTC can contain the right % of the med FOR $25.00 FOR 28 DAYS.
Might not even accept Medicare patients. Many Pharmist basically give the scripts away now. 90 days water pill is less than $2.00.
GoodRX prices on a lot of prescription drugs is eye-poppingly low...
This order directs Medicare not to pay any more than other countries are paying. And allows importation of drugs from other countries.
Which means that the drug companies will have to even the prices. Will result in lower prices in the US and higher prices in the other countries until they equal.
However, the other countries threaten drug companies with overriding their patents and letting domestic producers produce the drug, stealing the patent.
We’ll have to be prepared to raise tariffs on those countries or take other retaliatory actions if they do that.
That is great! Thank you.
Please, do tell...
I pay cash for my prescription drugs since it usually cheaper than my insurance deductible. Im fact at CVS I have to be careful and pretend I dont have insurance or they will insist on filling my prescription through the insurance company.
Same way with many medical procedures.
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