Biden Pushes for Lower Drug Prices in an Executive Order

An executive order by President Joe Biden was issued, with his plan unveiled today, directing the FDA to work with states and tribes to import prescription drugs from Canada and pushing the US Department of Health and Human Services (HHS) to increase support for generic and biosimilar drugs, to combat high prescription drug prices and price gouging.

The July 9, 2021, order encourages the Federal Trade Commission (FTC) to ban so-called pay-for-delay agreements, in which pharmaceutical manufacturers pay generic manufacturers to stay out of the market. This has raised drug prices by $3.5 billion a year, according to the fact sheet. A separate provision of the executive order also announces a policy for antitrust agencies to focus enforcement on several industries including health care.

The order pushes the FTC to ban or limit the use of noncompete agreements in employment contracts. These agreements limit employees’ opportunities when they leave the company, and can lead to costly lawsuits. It is not clear what impact any limitations would have on physicians currently working under a noncompete agreement.

The order also calls on the FTC to ban unnecessary occupational licensing, which limits a person’s chance to find employment across states where licensure may be different. It also encourages the FTC and the US Department of Justice to limit employers’ ability to share information on worker pay, which may amount to collusion.

According to a report released in the Wall Street Journal today, "the plan pushes to encourage the government to negotiate for Medicare drug costs and to pass the lower rates onto the private sector. There are three broad principles: support for price negotiation with drug manufacturers and limits on drug-price increases, promotion of industry competition and support for public and private research into new treatments."

"Other measures include drug importation programs that reduce costs. According to the plan, the HHS could collect data from insurers and third-party benefit managers to improve transparency about prices, rebates and out-of-pocket spending on prescription medications."¹

Reference

1. Armour S. WSJ news exclusive | Biden Administration Unveils Plan to Cut Prescription-Drug Prices. The Wall Street Journal. https://www.wsj.com/articles/white-house-unveils-plan-to-cut-prescription-drug-prices-11631181600. Published September 9, 2021. Accessed September 9, 2021