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Orders affect insulin and epinephrine, drug importation, PBM rebates; President will sign fourth order establishing 'MFN' price for Part B drugs if Congress, pharmas fail to act

On Friday, July 24, the Trump Administration released a highly anticipated plan aimed at lowering drug prices. The plan, a series of four executive orders, is intended to reduce the price of prescription drugs and increase affordability and accessibility for affected Americans. The four orders would:

1. Require Federally Qualified Health Centers to pass through savings on insulin and injectable epinephrine from the 340B program directly to certain low-income patients allowing them to acquire the drugs at cost;
2. Expand on the administration's earlier drug importation efforts, broadening them to include insulin and epinephrine products;
3. Eliminate current regulations permitting manufacturer rebates to pharmacy benefit managers (PBMs), unless the rebates are provided directly to the patient at the pharmacy counter ("Rebate Rule"), and
4. Create a Most Favored Nation (MFN) policy basing the price of certain Medicare Part B drugs on prices in economically comparable countries.

These orders include policies long under consideration by the administration and will all require regulatory action prior to taking effect. The administration released the first three executive orders after the president's signing ceremony. The fourth executive order on the price of certain Part B drugs (MFN) is being held back. The White House indicated that the president will move forward with the fourth order if Congress fails to act on prescription drug legislation prior to August 24.

The attached Tax Alert has additional details.

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Full text of Tax Alert