An executive order signed this week by President Donald Trump directing pharmaceutical companies to drop their prices in line with what other countries pay will be challenging to implement, say analysts and legal experts.
The order gives drugmakers price targets in the next 30 days, and will take further action to lower prices if those companies do not make “significant progress” toward those goals, reports Reuters.
Trump told a press conference the government would impose tariffs if the prices in America did not match those in other countries, and said he wanted cuts of between 59% and 90%.
The United States pays the highest prices for prescription drugs, often nearly three times more than other developed nations.
In his first term Trump tried to bring the US in line with other countries but was blocked by the courts.
If companies do not meet the government’s expectations, it will use rule-making to bring prices to international levels and consider a range of other measures, including importing medicines from other developed nations and implementing export restrictions, a copy of the order showed.
Trump’s order directs the government to consider facilitating direct-to-consumer purchasing programmes that would sell drugs at the prices other countries pay.
Trade groups representing biotech and pharmaceutical companies decried the move, with Stephen Ubl, CEO of industry trade group PhRMA, saying the real reasons for high drug prices included “foreign countries not paying their fair share and middlemen driving up prices for US patients”.
The order also directs the US Federal Trade Commission to consider aggressive enforcement against what the government calls anti-competitive practices by drugmakers.
The executive order is likely to face legal challenges, particularly for exceeding limits set by US law, including on imports of drugs from abroad, said health policy lawyer Paul Kim. “The order’s suggestion of broader or direct-to-consumer importation stretches well beyond what the statute allows.”
Such challenges are probably month months away, and will come after the Trump administration takes more concrete action to force companies to lower prices instead of the “scattershot threats” included in the executive order, according to Lawrence Gostin, a Professor of Health Law at Georgetown Law.
“At the point when there are actual consequences and we know what they are, and when companies feel that they have to lower the price of their drugs, at that point we’re going to have a flood of litigation,” he said.
Reuters article – Trump executive order demands pharma industry price cuts (Open access)
See more from MedicalBrief archives:
Pharmacy middlemen charged with inflating drug prices
Can Big Pharma justify hefty drug prices?
Experts claim that Big Pharma hides true drug development costs