President Joe Biden signed an executive order last Friday pushing federal officials to drive prescription drug costs down. The order requires the U.S. Department of Health & Human Services (HHS) to outline within 90 days how it will use new models of care and payment to cut drug costs, according to the White House official, who declined to be identified previewing the president's action.
The executive order aims to lower prescription drug costs across the US and follows landmark health-care legislation passed by Congress earlier this year that allows the HHS to negotiate drug prices with pharmaceutical companies.
Health and Human Services Secretary Xavier Becerra will “consider whether to select for testing by the Innovation Center new health care payment and delivery models that would lower drug costs and promote access to innovative drug therapies for beneficiaries enrolled in the Medicare and Medicaid programs,” the executive order said.
“The goal here is to have the secretary define some areas of opportunity to increase access to drugs or lower prices for people on Medicare and Medicaid,” said Stacie Dusetzina, an associate professor in the Department of Health Policy at Vanderbilt.
“Part of this will be, ‘what could we do now or sooner?’ Some of the provisions for the Inflation Reduction Act don’t kick in for a couple of years,” she said, referring to the legislation under which HHS can negotiate drug prices.
“There have already been attacks on the Inflation Reduction Act, and some Republican members talking about repealing it, or going after certain parts of the law,” she said.
Meanwhile, congressional Democrats have pushed the Biden administration to take bolder measures against rising drug costs.
Sen. Elizabeth Warren (D-Mass.) and others over the past year have urged Biden to consider using existing legal tools to help drive down the cost of pricey prescription drugs.
Advocacy groups have likewise joined the fray, asking for the administration to bypass Congress and use executive powers to reduce costs.
However, as TSCL has previously reported, the newly acquired power to negotiate drug prices is controversial, with the powerful pharmaceutical industry lobbying against the rule and considering legal actions to prevent its implementation.
In addition, Republicans have already proposed legislation that would strip Medicare’s negotiation ability before the negotiating has even begun.
Starting next year, drug companies will also have to pay penalties to Medicare if they raise the cost of their products at a rate that outpaces inflation.
While the new law lowering drug prices is far from perfect, TSCL is opposed to all efforts to block or repeal the new law.