President Trump issued an executive order (EO) Tuesday that calls for significant changes to the 340B Drug Pricing Program, Medicare site-neutral payment, and Medicare drug price negotiation process.
The EO makes significant changes to the 340B program by:
- Directing the Department of Health and Human Services (HHS) to survey hospital acquisition costs for medications and reduce Medicare payments to 340B covered entities to the actual acquisition costs
- Requiring federally qualified health centers to provide access to insulin at or below their 340B acquisition cost
The EO directs HHS to evaluate and propose Medicare site-neutral regulations to discourage a shift in drug administration volume from physician office settings to hospital outpatient departments.
The EO also directs HHS to modify the implementation of the Inflation Reduction Act (IRA) Medicare drug price negotiations by:
- Providing transparency in the implementation of the IRA drug price negotiations
- Treating biologic and small molecule drugs similarly when negotiating Medicare drug prices (small molecule drugs are currently subject to price negotiation sooner than biologics)
Additionally, the EO requires the Department of Labor to give employers greater transparency into direct and indirect pharmacy benefit manager compensation.
The EO also seeks recommendations on how to:
- Stabilize and reduce Medicare Part D premiums.
- Improve the drug supply chain, making it more competitive, efficient, transparent, and resilient.
- Accelerate the approval of generics and biosimilars.
- Investigate and report on pharmaceutical manufacturer anti-competitive behavior.
ASHP is evaluating the impact of this executive order and will provide additional analysis in the coming days.
