The top Democrat on the House Oversight and Government Reform Committee accused President Donald Trump of reneging on a campaign pledge to take forceful action to rein in escalating prescription drug prices.
"Recent reports indicate you are poised to issue an executive order that implement administrative action culled directly from the pharmaceutical industry wish list," Rep. Elijah Cummings wrote in a letter June 21 to the president urging him to rethink an executive order addressing drug prices that the White House is preparing. "This would be a betrayal of the very people who supported you and rely on you to make good on your promises."
Cummings, who was joined in the letter by Rep. Peter Welch, D-Vt., said he is disappointed that Trump appears unwilling to let Medicare use its market leverage to negotiate lower drug prices with pharmaceutical companies.
The Maryland lawmaker recounted a March 8 meeting that he and Welch had with Trump in the Oval Office to discuss drug price policy. "You appeared to embrace our draft legislation, the Medicare Drug Price Negotiation Act, which would implement your oft-repeated campaign pledge to empower the federal government to negotiate with pharmaceutical companies to lower medicare drug prices—a proposal supported by 92% of Americans."
They note that Trump directed Health and Human Services Secretary Tom Price to review the legislation and provide feedback. "Since our meeting more than three months ago, we have heard nothing more from you or Secretary Price," they wrote.
Cummings and Welch said Trump's campaign promises gave hope to many supporters of government intervention in drug prices, "but your planned executive actions suggest that you have abandoned these promises in favor of the very pharmaceutical lobby you warned of."
Also Wednesday, The New York Times reported on a draft of the pending executive order it obtained. According to the Times, the order "appears to give the pharmaceutical industry much of what it has asked for—and no guarantee that costs to consumers will drop."
The main thrust of the order, which is still a work in progress, would be to ease regulatory hurdles to drug approvals, which could lower the cost of bringing new treatments to market and thus lower prices.
The four-page document also proposes to require the United States trade representative to study price differences between the United States and other countries and to examine whether trade agreements should be revised protect intellectual property rights of U.S. drug companies.
Also targeted would be a federal program requiring the drug industry to give discounts to hospitals and clinics that serve large numbers of low-income patients.
The order would promote value-based pricing, under which drugmakers would be paid more when their drugs prove effective at lowering treatment costs, particularly for chronic conditions that account for a huge percentage of health care costs like diabetes, multiple sclerosis, hepatitis C and high cholesterol.
Another idea would attack patients' rising out-of-pocket costs by passing more of the savings pharmacy benefit managers negotiate on drug prices to Medicare recipients.
Any restraint on drug prices could affect the bottom lines of the biggest makers of branded drugs, including AbbVie Inc. (ABBV) - Get Report , Amgen Inc. (AMGN) - Get Report , Johnson & Johnson (JNJ) - Get Report , Merck and Co. (MRK) - Get Report and Pfizer Inc. (PFE) - Get Report .
Any move that alters the current drug pricing system could also shift the leverage various players in the drug supply chain have relative to each other. For instance, an independent pharmacy benefit manager like Express Scripts Holding Co. (ESRX) could find itself with less reason for being. Drug distributors to retail chains like Cardinal Health Inc. (CAH) - Get Report and McKesson Corp. (MCK) - Get Report may find their profit margins diminished.
Insurers like UnitedHealth Group Inc. (UNH) - Get Report , Cigna Corp. (CI) - Get Report , Anthem (ANTM) - Get Report , Aetna Inc. (AET) and Humana Inc. (HUM) - Get Report , which have the data on consumers drug purchases and medical outcomes, would benefit if value-based pricing models are implemented. Even drugstore chains line Walgreens Boots Alliance (WBA) - Get Report and Rite Aid Corp. (RAD) - Get Report , with similar access to consumer data could parlay that information to their benefit.
Changes to the current drug pricing system could also alter the leverage various players in the drug supply chain have relative to each other. For instance, an independent pharmacy benefit manager like Express Scripts could find itself with less reason for being. Drug distributors to retail chains like Cardinal Health and McKesson may find their profit margins diminished.