Draft Drug Price Order Focuses on Regulations, Trade

Administration seeks faster drug approvals, promoting drug competition

The Trump administration is readying an executive order on drug regulations. (Scott Olson/Getty Images)


The Trump administration might seek to roll back regulations in pursuit of faster drug approvals, promoting drug competition and new payment models for federal health insurance programs, according to a draft executive order obtained by CQ Roll Call.

Some of the items listed would benefit pharmaceutical companies, despite President Donald Trump’s pledge earlier this year to take steps to rein in the industry because he said it was “getting away with murder.” But the administration is also hinting that it could address some anti-competitive behavior in that sector. There are also a number of recommended proposals that could give incentives for the development of generic drugs.

The White House declined to comment on the draft document. Lobbyists who had been briefed on the draft confirmed its authenticity, and one drug industry lobbyist said he expected the executive order to be released next week.

The document instructs administrative agencies to review policies related to pharmaceutical research and development that could result in unnecessary price increases or expenses for manufacturers. The heads of relevant agencies are ordered to submit recommendations for policy changes when they submit their fiscal 2019 budget proposals.

The draft order would instruct the administration to seek more favorable trade agreements to help boost the prices of American prescription drugs sold overseas. The pharmaceutical industry argues that weak patent protections in foreign countries mean that Americans are stuck with higher prices to subsidize research and development.

The White House would have the Food and Drug Administration “address unintended consequences of existing rules that may reduce competition,” the document said.

FDA Commissioner Scott Gottlieb announced Wednesday that the FDA would hold a public meeting on ways to address anti-competitive behavior in the pharmaceutical industry. He specifically pointed to the abuse of drug safety protocols that some companies use to block generic competitors’ access to samples. Gottlieb told lawmakers Tuesday that the FDA could take unilateral steps to address this. While several bills before Congress would also address this issue, lobbyists expressed skepticism that the administration would go so far as to endorse any of the legislation.

The federal Medicare and Medicaid programs would have to take steps to explore “new models and demonstrations that lower drug and medical product costs” under the draft. This is likely referring to a concept known as “value-based” or “outcomes-based” contracting, which some private payers and pharmaceutical companies have pursued to make drug spending more predictable.

The order could also result in the rollback of 2010 guidance impacting a federal program, commonly known as the 340B program, under which companies must provide discounts on outpatient drugs to certain health care providers. The pharmaceutical industry has argued it has ballooned beyond its original intent and has sought to rein it in.

Another document that had been circulating among policy circles in Washington, D.C., included additional policy options that weren’t detailed in the executive order draft. Lobbyists who reviewed that document cautioned that some of the proposals were unlikely to be pursued.

Among the more likely of those options would be pursuing administrative action that would allow drug manufacturers to share information with the insurance industry on new products before they are federally approved — something directly off the pharmaceutical lobby’s wish list. Making those changes to the FDA’s policies on so-called off-label promotion would likely be a prerequisite for companies pursuing the “value-based” drug contracts.

The document also proposed administrative action to “streamline” a federal program that requires drug and device companies to report information about the payments it makes to physicians and hospitals. Known as Open Payments, congressional attempts to roll back requirements on the two industries has been met with fierce resistance by both outside groups and lawmakers from both parties.

The efforts behind the draft executive order and proposal document were first reported by The New York Times and Politico.

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