President Donald Trump, in an April 15 executive order, directed federal agencies to implement policies to lower drug prices, improve pharmacy benefit manager transparency, and build on provisions of the Inflation Reduction Act (IRA, P.L. 117-169, PDF). The order instructs the secretary of the Department of Health and Human Services (HHS) to, within 180 days, publish a plan to conduct a survey of actual acquisition costs for covered outpatient drugs administered at Outpatient Prospective Payment System (OPPS) hospitals. It also directs the HHS secretary to consider adjusting Medicare drug payments to OPPS hospitals to more closely resemble acquisition costs reported on the survey.
In another provision, the secretary is tasked with proposing a regulation to ensure that Medicare is not encouraging a shift in drug administration volume from physician office settings to more costly hospital outpatient departments, referencing site-neutral policies that reduce payment for certain OPPS services by 60%. Additionally, the executive order calls for the development of a payment model to allow Medicare to obtain better value for high-cost prescription drugs and biologicals, which could be a reference to the Most Favored Nation model that was ultimately withdrawn during Trump’s first term [refer to Washington Highlights, Jan. 7, 2022].
Other sections of the executive order include requiring community health centers to pass on the 340B price of insulin and injectable epinephrine to their low-income patients; encouraging importation of prescription drugs to lower drug prices; improving on the provisions of the IRA by identifying improvements on stabilizing and reducing Medicare Part D premiums, issuing guidance to prioritize the selection of high-cost prescription drugs, and aligning the treatment of small molecule drugs with that of biologicals under the IRA; and improving payments for drugs under the Medicaid Drug Rebate Program by ensuring accurate rebates and linking payments to value.
The White House published an accompanying fact sheet summarizing provisions of the executive order.