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Public Policy Newsletter Article

Biocom Rejects Executive Order on Drug Pricing

  • 2020-09-24T14:30:00.000+0000
  • Author: Laure Fabrega

On September 14, Biocom issued a statement rejecting the far-reaching drug pricing executive order signed by President Donald Trump the day before. The executive order would apply foreign price controls to drugs paid for by Medicare Part B and D, expanding the original scope of affected drugs. Indeed, the Trump Administration had previously indicated that it would be limited to drugs administered in doctors' offices.

“On behalf of California’s life sciences community, we are deeply disappointed in the executive order issued by the Trump Administration that would import price controls from countries that deny seniors access to many life-saving products available in the U.S.," said Joe Panetta, president and CEO of Biocom. "Imposing foreign pricing models on Medicare Part B and D drugs would inevitably result in delays in biomedical innovation and threaten the research and development of our nation’s most innovative treatments.

The U.S. produces two-thirds of the world’s medicines, and it is leading the fight to end a sweeping pandemic that has sickened millions and brought the world’s economy to a halt. Now is not the time to attack the innovative companies that are dedicating an incredible amount of resources to control this deadly virus while still continuing research on all the other diseases affecting millions of patients worldwide. California, which is one of the world’s leaders in biomedical innovation, would be among the first to suffer. Biocom supports policies that foster innovation while reducing patients’ out-of-pocket costs and expanding access to novel therapies.”

The order calls on the Health and Human Services (HHS) Secretary to implement rulemaking processes to test payment models for both Medicare Part B and D drugs using “most-favorite-nation” prices. Most-favored-nation price means the lowest price, after adjusting for volume and differences in national gross domestic product, for a drug that a manufacturer sells in an OECD country that has a comparable per-capita gross domestic product. A 2018 proposal, which had been withdrawn, called for the average price of a drug within a basket of developed countries. If implemented, this policy would not go into effect until 2021 at the earliest.