President Trump signed an executive order on Monday asking drug manufacturers to voluntarily reduce the prices of key medications in the United States.
But the order does not quote an obvious legal authority to demand lower prices. The order said the administration would consider taking regulatory actions or importing medications from other countries in the future if medication manufacturers do not comply.
It was a kind of victory for the pharmaceutical industry, which had a leg reinforcement for a policy that would be much more detrimental to their interests.
On Sunday night, Trump said in a social publication of the truth that he would link the prices of American medicines to those of the pairs under a “most favored nation” price model, a policy that tried unsuccessfully in his first mandate for a small set of drugs in Medicare. His executive order on Monday does not do that. Pharmaceutical actions increased Monday morning in the news.
Mr. Trump’s executive order occurred only a few hours after the Republicans of the House of Representatives offered a wide set of changes in medical care policies that around $ 700 billion of medications and the markets of Obamacare approximately one decade and the Congress of 8.6 of Willeran declined to include any disposition to directly limit the prices of the medications in that package.
The executive order also asked federal agencies to investigate why European countries obtain lower prices and push them to pay more. The Trump administration has limited leverage to increase prices in Europe.
“I’m not calling pharmaceutical companies,” Trump said Monday shortly before signing the order. “I am really calling countries than pharmaceutical companies.”
With his executive order, Mr. Trump chose not to propose measures that could have had more teeth, such as asking for his administration to work with Congress on legislation or writing regulations to change how government health programs pay for some drugs.
Many Republican legislators oppose regulations on medicines prices, but Trump has criticized the current system, in which pharmaceutical companies charge the United States significantly higher prices than the rest of the world.
In Monday’s event, Trump directed his anger towards European governments that have negotiated lower prices.
“We are going to help pharmaceutical companies with the other nations,” he said.
Trump threatened to use commercial policy to promote European countries to pay more for prescribed medications. But pharmaceutical companies are already locked in contracts with governments, and if they try to charge more for new medications, European countries can resist covering the issue.
In his first mandate, Trump tried unsuccessfully to promulgate a more substantive policy to reduce the prices of medications for Medicare, the health insurance program that covers 68 million Americans who are about 65 years old or have disabilities. That plan would have been applied only to 50 medications, administered in clinics and hospitals, which are paid by Medicare. A Federal Court blocked it, ruling that the administration had jumped the steps in the policy formulation process.
Some experts said the policy could approve the legal meeting if they had pursued the leg, and others said that would have needed Congress to approve a law.
The executive order of Monday, in the face, demands changes in a much greater number of drugs, and for all Americans, not only to patients insured by Medicare. But it lacks a clear mechanism to promulgate price reductions.
The order said that if the initial actions did not progress enough to reduce the prices of the drugs of the United States, the Trump administration can “propose a ruler plan to impose more favorable prices in the nation.”
Democrats have introduced numerous bills so that US prices are more in line with those of their foreign partners, and the legislation approved by the Biden administration allows you to Medicar negotiate the direct price of a limited drug set used in the program. In general, policies that would reduce drug prices are very popular among Republican and democratic voters.
The pharmaceutical industry has also prepared to punish tariffs on imported medicines, which Trump has promised to impose soon. Trump recently said he was planning an ad on pharmaceutical rates this month. Rates will love more that would love medicines in the United States and reduce drug manufacturers, even if they can transmit some of the additional costs.
Pharmaceutical investors felt relieved that Trump did not propose the most substantive policy he had threatened. After falling into trade prior to trade, pharmaceutical actions recovered when Trump’s move details were clear. Merck’s shares rose 5 percent on Monday morning. Pfizer increased by 3 percent. A narrower biotechnology actions increased by 3 percent.
“Better than feared,” Wall Street Bank Jefferies analysts wrote in a note to investors.
Speaking on Monday, lobbying groups for drug manufacturers said that the United States should not look in other countries how much they pay for drugs.
But the main industry group, Phrma, applauded Mr. Trump for threatening to use trade negotiations to boost foreign governments “to pay their fair part for medicines.”
“American patients should not pay the bill for global innovation,” said Stephen J. UBL, executive director of Phrma.
The prices of brand medications in the United States are three times higher, on average, than those of even nations.
That is despite the fact that much of the research that leads to new drugs is located in American laboratories and hospitals.
Medication manufacturers generate a substantial majority of their global sales profits in the United States and generally design their commercial strategy throughout the US market.
Pharmaceutical companies argue that high prices in the United States come with additional benefits: industry financed analyzes have found that patients in the United States obtain faster medications and with less insurance restrictions, than those of other Coundies.
In other rich countries, the Government generally pays prescription medications for the entire population, negotiating substantial discounts from medication manufacturers. Many other nations make their own comparisons with prices in even countries to help determine what they are willing to pay.
But in the United States, the government has very little formal participation to establish drug prices, apart from the Biden era program for a limited number of medications in Medicare. The Trump administration now supervises that program.
This month, Senator Josh Hawley, a Republican from Missouri, and Senator Peter Welch, a Vermont Democrat, introduced a bill that would limit drug prices in the United States to an average prices paid by a group of even countries.
In an interview, Mr. Welch said he agreed with Trump that Americans pay too much for drugs and that international comparisons could help establish more just prices. But he believes that Congress needs to address the problem to guarantee a lasting policy.
“It’s really important to do this legislatively,” he said.
