(The Center Square) – The results of a May executive order aiming to reform drug pricing are beginning to materialize, per an administration announcement Tuesday.
Major pharmaceutical manufacturer Pfizer has agreed to slash prices on many of its drugs in the U.S. after months of negotiations with the administration. Both those involved in the discussions and observers were uncertain how they would accomplish the president’s directive.
“We talked through the winter, we talked through the spring, we talked through the summer – and we got nowhere,” said Mehmet Oz, administrator for the Centers for Medicare & Medicaid Services. “It wasn’t until last week that we made a major breakthrough.”
Later, Medicare Director Chris Klomp, whom many credited with achieving the deal, took Oz’s comment even further.
“Mr. President, you have enabled something that as recently as last night, nearly everyone has said was impossible,” Klomp said.
In May, President Donald Trump signed an executive order that Oz then called the “most powerful executive order on pharmacy pricing and health care ever in the history of our nation.” The order called for the reduction of American pharmaceutical drug prices to the lowest price among economic peer countries – or what’s known as most-favored-nation pricing.
Americans often pay much more for their medications than people in other countries, according to the administration, and Trump saw that as those countries “freeloading” on the back of American-financed pharmaceutical innovation.
“As the President said, on average, we pay nearly three times what the rest of the wealthy world pays for branded pharmaceuticals, and yet we drive more than 50% of global [research and development], 50% of revenues, nearly 70% of profits,” Klomp said. “It’s morally unjust.”
Pfizer has agreed to sell some of its drugs in commercial, Medicare, Medicaid or cash-pay markets for no more than what it charges other countries, according to Klomp. Klomp distinguished between the deal and the government setting price caps on drug manufacturers’ products.
“These are not price caps. These are not price controls. They can price however they’d like. We’re simply asking them, and they are committing, not to undercut us in other countries,” Klomp said.
The White House also announced that it will soon launch a government-run, direct-to-consumer website, affectionately called “TrumpRx,” where Americans can buy their medications “often at full MFN and always at lower prices than currently available,” according to Klomp.
