Trump’s Executive Order Limiting Medicare Drug Payments Faces Hurdles

Under test payment model, Medicare would pay no more than most-favored-nation price for Part B and Part D drugs, but how and when the model program would be implemented remains unclear. BIO may pursue legal action as questions on how plan would be implemented and if the administration will provide notice and comment period for stakeholder input remain.

Many pills and tablets on dollar bill and decrease graph
President Trump issues executive order limiting Medicare drug payments to most-favored-nation price • Source: Shutterstock

President Trump issued an executive order to limit the amount Medicare pays for Part B and Part D prescription drugs and biologics to the “most-favored-nation” price but it is uncertain what an implementing rule would consist of and when the model payment plans would be implemented.

What seems clear from the administration’s many drug pricing announcements is that the president hopes to make antagonism of biopharma companies part of his reelection strategy, an approach that could spell trouble for industry regardless of who wins in November. (See sidebar.) In July, Trump announced that he would be issuing four executive orders on drug pricing, including a directive to advance international reference pricing for lowering Medicare Part B drug costs unless industry offered an alternative solution in the next 30 days

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