Lowering Drug Prices by Putting America First

Published date18 September 2020
Citation85 FR 59171
Record Number2020-20887
SectionPresidential Documents
CourtExecutive Office Of The President
Federal Register, Volume 85 Issue 182 (Friday, September 18, 2020)
[Federal Register Volume 85, Number 182 (Friday, September 18, 2020)]
                [Presidential Documents]
                [Pages 59171-59172]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2020-20887]
                [[Page 59169]]
                Vol. 85
                Friday,
                No. 182
                September 18, 2020
                Part VI
                The President
                -----------------------------------------------------------------------
                Executive Order 13947--Lowering Drug Prices by Putting America First
                 Presidential Documents
                Federal Register / Vol. 85 , No. 182 / Friday, September 18, 2020 /
                Presidential Documents
                ___________________________________________________________________
                Title 3--
                The President
                [[Page 59171]]
                 Executive Order 13947 of July 24, 2020
                
                Lowering Drug Prices by Putting America First
                 By the authority vested in me as President by the
                 Constitution and the laws of the United States of
                 America, it is hereby ordered as follows:
                 Section 1. Purpose. Americans pay more per capita for
                 prescription drugs than residents of any other
                 developed country in the world. It is unacceptable that
                 Americans pay more for the exact same drugs, often made
                 in the exact same places. Other countries' governments
                 regulate drug prices by negotiating with drug
                 manufacturers to secure bargain prices, leaving
                 Americans to make up the difference--effectively
                 subsidizing innovation and lower-cost drugs for the
                 rest of the world. The Council of Economic Advisers has
                 found that Americans finance much of the
                 biopharmaceutical innovation that the world depends on,
                 allowing foreign governments, many of which are the
                 sole healthcare payers in their respective countries,
                 to enjoy bargain prices for such innovations. Americans
                 should not bear extra burdens to compensate for the
                 shortfalls that result from the nationalized public
                 healthcare systems of wealthy countries abroad.
                 In addition to being unfair, high drug prices in the
                 United States also have serious economic and health
                 consequences for patients in need of treatment. High
                 prices cause Americans to divert too much of their
                 scarce resources to pharmaceutical treatments and away
                 from other productive uses. High prices are also a
                 reason many patients skip doses of their medications,
                 take less than the recommended doses, or abandon
                 treatment altogether. The consequences of these
                 behaviors can be severe. For example, patients may
                 develop acute conditions that result in poor clinical
                 outcomes or that require drastic and expensive medical
                 interventions.
                 In most markets, the largest buyers pay the lowest
                 prices, but this has not been true for prescription
                 drugs. The Federal Government is the largest payer for
                 prescription drugs in the world, but it pays more than
                 many smaller buyers, including other developed nations.
                 When the Federal Government purchases a drug covered by
                 Medicare Part B--the cost of which is shared by
                 American seniors who take the drug and American
                 taxpayers--it should insist on, at a minimum, the
                 lowest price at which the manufacturer sells that drug
                 to any other developed nation.
                 The need for affordable Medicare Part B drugs is
                 particularly acute now, in the midst of the COVID-19
                 pandemic, which has led to historic levels of
                 unemployment in the United States, including the loss
                 of 1.2 million jobs among Americans age 65 or older
                 between March and April of 2020. The COVID-19 pandemic
                 has also led to an increase in food prices, straining
                 budgets for many of America's seniors, particularly
                 those who live on fixed incomes. The economic
                 disruptions caused by the COVID-19 pandemic only
                 increase the burdens placed on America's seniors and
                 other Medicare Part B beneficiaries.
                 Sec. 2. Policy. (a) It is the policy of the United
                 States that the Medicare program should not pay more
                 for costly Part B prescription drugs or biological
                 products than the most-favored-nation price.
                 (b) The ``most-favored-nation price'' shall mean
                 the lowest price, after adjusting for volume and
                 differences in national gross domestic product, for a
                 pharmaceutical product that the drug manufacturer sells
                 in a member country of the Organization for Economic
                 Cooperation and Development that has a comparable per-
                 capita gross domestic product.
                [[Page 59172]]
                 Sec. 3. Ensuring the Most-Favored-Nation Price in
                 Medicare Part B. To the extent consistent with law, the
                 Secretary of Health and Human Services shall
                 immediately take appropriate steps to implement his
                 rulemaking plan to test a payment model pursuant to
                 which Medicare would pay, for certain high-cost
                 prescription drugs and biological products covered by
                 Medicare Part B, no more than the most-favored-nation
                 price. The model would test whether, for patients who
                 require pharmaceutical treatment, paying no more than
                 the most-favored-nation price would mitigate poor
                 clinical outcomes and increased expenditures associated
                 with high drug costs.
                 Sec. 4. General Provisions. (a) Nothing in this order
                 shall be construed to impair or otherwise affect:
                (i) the authority granted by law to an executive department or agency, or
                the head thereof; or
                (ii) the functions of the Director of the Office of Management and Budget
                relating to budgetary, administrative, or legislative proposals.
                 (b) This order shall be implemented consistent with
                 applicable law and subject to the availability of
                 appropriations.
                 (c) This order is not intended to, and does not,
                 create any right or benefit, substantive or procedural,
                 enforceable at law or in equity by any party against
                 the United States, its departments, agencies, or
                 entities, its officers, employees, or agents, or any
                 other person.
                
                
                 (Presidential Sig.)
                 THE WHITE HOUSE,
                 July 24, 2020.
                [FR Doc. 2020-20887
                Filed 9-17-20; 11:15 am]
                Billing code 3295-F0-P
                

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