President Trump on Monday signed an executive order Drug makers ask to voluntarily lower the prices of important medicines in the United States.
But the order does not mention a clear legal authority to oblige lower prices. The order said that the administration would consider taking legal actions or to import medicines from other countries if drug makers do not pay.
It was something of a victory for the pharmaceutical industry, which deleted a policy that would be much more harmful to its interests.
On Sunday evening, Mr. Trump said in a truth social post That he would link American drug prices to those in Peer -countries under a “most favorite nation” price model, a policy that he tried in vain in his first term for a small set of medicines in Medicare. His executive order on Monday does not. Pharmaceutical shares rose on the news on Monday morning.
The executive Order of Mr. Trump came only a few hours after Huis Republicans offered an extensive series of changes in health care policy That would cut around $ 700 billion from Medicaid and the Obamacare marketplaces for more than ten years and would lead to an estimated 8.6 million Americans becoming uninsured. The congress refused to include provisions to immediately limit the prices in that package.
The executive command also called on federal agencies to investigate why European countries receive lower prices and to encourage them to pay more. The Trump administration has a limited lever to increase prices in Europe.
“I don’t knock on the pharmaceutical companies,” Mr Trump said shortly before signing the order on Monday. “I really knock the countries more than the pharmaceutical companies.”
With his executive order, Mr Trump chose not to propose measures that could have had more teeth, such as calling his administration to work with the congress on legislation or writing instructions to change how the health programs for the government pay for some drugs.
Many Republican legislators oppose the regulations for the prices of drugs, but Mr. Trump has long put a Scholte against the current system, in which pharmaceutical companies charge the United States considerably higher prices than the rest of the world.
During Monday’s event, Mr Trump focused his anger at European governments that negotiated lower prices.
“We are going to help the pharmaceutical companies with the other countries,” he said.
Mr Trump threatened to use trade policy to encourage European countries to pay more for prescription medicines. But pharmaceutical companies are already locked up in contracts with governments, and if they try to charge more for new medicines, European countries cannot cover themselves at all.
In his first term, Mr. tried. Trump in vain to perform a more substantive Policy to reduce drug prices For Medicare, the health insurance program that covers itself 68 million Americans who are older than 65 or have a disability. That plan would only apply to 50 medicines, administered in clinics and hospitals, which are paid by Medicare. A federal court blocked it and ruled that the government had done Steps skipped In the policy process.
Some experts said that the policy could have passed the legal collection if it had been pursued by the book, and others said he needed the congress to take a law.
The executive order of Monday, at first glance, requires changes in a much larger number of medicines, and for all Americans, not only patients insured by Medicare. But it lacks a clear mechanism for determining the price reductions.
The order said that if the first actions have made insufficient progress in reducing US drug prices, the Trump administration “can propose a regulation plan to impose the most guided nation prices.”
Democrats have introduced countless accounts to bring US prices more into line with those of foreign colleagues, and the legislation adopted during the BIDEN administration enables Medicare to directly negotiate the price of a limited set of medicines used in the program. In general, there are policy that would lower the prices for medicines, very popular Among both Republican and Democratic voters.
The drug industry has also braced itself to penalties Rates for imported medicinesThat Mr. Trump has sworn quickly to impose. Mr. Trump recently said that this month he was planning an announcement of pharmaceutical rates. Rates would probably increase some drug prices in the United States and lower the profit of drug makers, even if they can pass on some of the extra costs.
Pharmaceutical investors were relieved that Mr Trump did not represent the more substantive policy that he had threatened. After the trade in premarket, pharmaceutical shares recovered when the details of Mr Trump’s relocation became clear. Merck’s stock rose by 5 percent on Monday morning. Pfizer’s rose by 3 percent. An index of smaller biotechnological shares had risen by 3 percent.
“Better than feared,” analysts of the Wall Street Bank Jefferies wrote in a note to investors.
In Statements on MondayLobby groups for drug makers said that the United States should not look at other countries for how much they pay for drugs.
But the most important industrial group, Phrma, welcomed Mr Trump for threatening to use trade negotiations to push foreign governments “to pay their reasonable share for medicines.”
“US patients should not pay the bill for global innovation,” said Stephen J. UBL, Chief Executive of Phrma.
Brand name prices in the United States Three times as highOn average, like that in Peer countries.
That is despite the fact that much of the research that leads to new drugs takes place in American laboratories and hospitals.
Drug makers generate one substantial majority From their worldwide profit of sales in the United States and usually design their business strategy around the American market.
Pharmaceutical companies claim that the higher prices in the United States have additional advantages: the industry has shown analyzes that patients in the United States receive medication fasterAnd with fewer insurance restrictions than those in other countries.
In other rich countries, the government generally pays prescription medicines for the entire population, with negotiating considerable discounts of drug makers. Many other countries Do their own comparisons With prices in Peer -countries to help determine what they are willing to pay.
But in the United States, the government has very little formal involvement in determining drug prices, except for the BIDen era program for a limited number of medicines in Medicare. The Trump administration now supervises that program.
This month, Senator Josh Hawley, a Republican from Missouri, and Senator Peter Welch, introduced a Democrat from Vermont, a bill that would limit the prices of medicines in the United States to an average of the prices paid by a group of peer countries.
In an interview, Mr Welch said that he agreed with Mr. Trump that Americans pay too much for drugs and that international comparisons can help to determine previous prices. But he thinks the congress should tackle the problem to guarantee a sustainable policy.
“It is really important to do this by law,” he said.
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