OBR Daily Commentary


Executive Order Would Tie U.S. Drug Prices to What Other Countries Pay

(ASCO In Action) Sept 15, 2020 - On September 13, President Trump signed an executive order (EO) aiming to address high prescription drug prices by tying payments for certain Medicare drugs to the costs the treatments sell for outside the United States (U.S.).

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William McGivney, PhD (Posted: September 28, 2020)


Clearly, there is general agreement on the fact that many drugs and biologics for cancer treatment are too expensive. Examples of this include the present ASCO statement of concern and a statement contained in an Aug 27 release by the Community Oncology Alliance. An equitable fix requires that patients’ interests be first and foremost. However, patients’ interests for access to an ever-improving armamentarium of drugs and biologics are inextricably dependent on both a healthy, profitable biopharma industry and a healthy, financially-sound provider delivery system.
The needed solution may indeed eventually have to be dictated by the White House or some other authority in Washington DC. What that solution might be is indeed incredibly difficult. As I moderated a session in the fall of 2019, I was surprised to hear a KOL insurer opine that he/she did not think that an International Pricing Index-derived price based almost exclusively on prices “allowed” by European government insurers would be sufficient for to maintain needed levels of access, prescribing and innovation in the United States.
At present, it has been argued by many (organizations and individuals) that now is the worst of all times and timing for this Executive Order to have been released. The exigencies of fulfilling electoral promises and of the pricing issue itself meet the deleterious impacts of the COVID pandemic with patients delaying care in Oncology; hospitals and practices finally seeing more and more of those patients who need to be diagnosed, treated and monitored; hospitals and practices financially hurting from revenue shortfalls caused by the pandemic; etc.
So, the “ball” will now be lateraled over to the CMMI Innovation Center to innovate a reasonable solution to be evaluated under traditional demonstration program rules. Organizations already are demanding that any demonstration project not require the mandatory participation of oncologists; the project should be voluntary. One would expect a relatively measured approach by CMMI as the CMMI folks will be anxiously awaiting to see which Party will reside in the White House for the next 4 years and, thus, drive the pricing agenda and activities. As such, the Executive Order will cause a timeout to be taken as this long-running pricing policy stalemate waits for Overtime.



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