Key Takeaways
- President Trump’s executive order on drug pricing calls for eliminating the four-year difference between when Medicare drug price negotiations apply to small molecules and biologics, but implementation is not guaranteed.
- The change to the Inflation Reduction Act mandate was cheered by PhRMA and analysts, but other drug pricing directives in the executive order could have negative impacts on the pharma industry.
- Trump’s order also seeks greater pharmacy benefit manager transparency, improved importation of lower cost drugs and faster approvals of generics, biosimilars and second-to-market drugs.
President Donald Trump’s executive order directing US health care regulators to enact policies that lower drug prices serves up what could be a major win for pharmaceutical companies – eliminating the four-year difference in the timeline for Medicare drug price negotiations between small molecules and biologics under the Inflation Reduction Act (IRA)
In addition to addressing the so-called “pill penalty” in the IRA, which makes negotiated Medicare drug pricing applicable to small molecules nine years after US Food and Drug Administration approval versus 13 years for biologics, Trump’s 15 April executive order gives Health and Human Services (HHS) secretary Robert F. Kennedy Jr
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