After all the hand-wringing about pharma stock prices this weekend, the corporate media was eerily quiet about the actual order. Yesterday, Reuters ran a short blurb headlined, “
Trump signs executive order to demand pharma industry cuts prices.”
The order was titled, “
Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” It stopped short of
actually ordering the government to stop buying overpriced drugs, instead encouraging drugmakers to voluntarily, and directed the agencies to begin communicating “most favored nation” price targets to pharma manufacturers.
“Most favored nation” (MFN) pricing means that Americans should pay the lowest price that any country pays for drugs. In other words, under an MFN pricing model, Americans would pay no more for a drug than the lowest price that drug is sold for in any other developed country (like Germany, France, or Canada). If a pharmaceutical company sells a cancer drug in France for $80 a dose and charges $400 in the U.S., this policy demands the $80 price for Americans, too.
The most creative part of the order was Section 4, which directed HHS to explore a “direct to consumer” model for domestic drug sales. Instead of going through a pharmacy benefit manager (PBM), insurance company, or even local CVS pharmacies, patients would log into a government-approved portal or a manufacturer website and order their medication directly— like buying sneakers directly from Nike instead of at the mall.
It was a shot across pharma’s midships. For years, pharmaceutical lobbyists have insisted
they’re not the villains—
it’s all the middlemen, they claim. Insurers, pharmacy benefit managers, and retail chains are the ones jacking up U.S. prices. Fine, said Trump. Let’s test that theory.
Sell direct.
Trump’s executive order dared them to put their drugs where their big fat mouths are: if drugmakers really can offer the lowest global prices when there’s no insurance bureaucracy in the way, then do it—
right to the consumer. It actually drops the hammer on
both sides of the supply chain. Pharma can now prove it’s not the price-gouger, while middlemen are put on notice: cooperate with MFN pricing, or get completely cut out of the deal.
If that doesn’t work, then the sledgehammer could fall. “The HHS Secretary shall propose a rulemaking plan to
impose most-favored-nation pricing,” the order said. It also directed HHS and the FDA to start fast-tracking waivers allowing Americans to buy drugs from overseas suppliers. In other words, it told Big Pharma:
Either sell at MFN prices voluntarily, or we’ll let Americans buy your drugs directly from other countries at those prices anyway.
In a major escalation from his drug price-lowering policies from Trump 1.0, the order also directed the DOJ to pursue
antitrust prosecution against anyone —drugmakers, PBMs, or even foreign governments—who interfere with MFN pricing or direct-to-consumer programs.
Trump 1.0’s much less ambitious drug policies were promptly buried in an avalanche of litigation until President Autopen unwound them. But yesterday’s order seemed much more carefully designed to evade judicial micromanagement.
As I recall, the corporate media spent weeks swooning over Joe Biden’s insulin price cap, which only applied narrowly to Medicare recipients and rode the coattails of a congressional bill. Meanwhile, Trump’s executive order could shatter the entire global drug pricing scam and give Americans direct access to Rock of Gibraltar-low prices. Oh well. Yawn. It was
media radio silence.
The Times, the Journal, the Post—
not one featured the executive order on their homepage. Imagine how many industry quotes they could’ve collected. Or how many heart-rending anecdotes about Illinois nursing home patients who spend half their Social Security on pills.
Obviously, when
President Trump does something that actually affects Main Street, it doesn’t count as news. So quick! Cue the story about Kennedy wading in the creek!
HHS Sec. triggers media by walking in a creek; Pope Leo scolds press; Trump wins IRS data fight; FDA hints vax reform; and Trump’s drug-price order lands—less flashy, more explosive.
www.coffeeandcovid.com
