On Oct 14, President Biden signed a new Executive Order (EO) aimed at reducing prescription drug prices. The EO supplements the proposals included in the Inflation Reduction Act of 2022 (the “IRA”), which included provisions allowing the Centers for Medicare & Medicaid Services (CMS) to negotiate the prices of some drugs and limit the out-of-pocket costs of insulin. However, the IRA has a four-year implementation timetable, so the administration is pursuing options to reduce prices more quickly.
Specifically, the EO directs the Department of Health and Human Services (HHS), through the Center for Medicare and Medicaid Innovation (CMMI), to use the next 90 days to draft a report identifying new methods for reducing prescription drug prices. The EO directs CMMI to test “new healthcare payment and delivery models that would lower drug costs and promote access to innovative drug therapies for beneficiaries enrolled in the Medicare and Medicaid programs, including models that may lead to lower cost-sharing for commonly used drugs and support value-based payment that promotes high-quality care.” The report is required to include timelines for testing selected models.
“ASHP strongly supports efforts to reduce out-of-pocket drug prices for patients and the healthcare system,” said Tom Kraus, ASHP vice president of government relations. “We will continue to advocate for solutions that reduce prices and ensure optimal patient care.”
ASHP will continue to monitor HHS action on drug pricing and keep members updated on new developments.