On May 12, President Donald Trump signed an executive order giving drugmakers a 30-day deadline to electively lower prescription drug costs in the United States. If not, they face new limits in the future over what the government will pay.
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Amid rising prices for many different household items, American families wonder how much can really be accomplished in just one month. GOBankingRates talked to some experts about what to expect.
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Costs for Some Could Go Down
William Soliman, a former pharmaceutical executive and the founder and CEO of the Accreditation Council for Medical Affairs (ACMA), said Medicare patients may see a small decrease thanks to Trump’s move.
However, he added that overall the order is more bark than bite, considering he can’t make pharmaceutical companies cut prices on their name brand drugs at all — much less in the 30 days.
“Over half of the U.S. gets private insurance through their employers,” Soliman said. “These patients might see an increase in costs because pharma may look to offset their lost margin on the Medicare side with privately covered patients.”
Soliman said pharma companies may even start at a higher price point now for drugs, since they know they will need to negotiate down.
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Putting Accountability in Perspective
“Similar to the Medicare Inflation Reduction Act, pharma companies should expect to be held accountable to understanding their pricing alongside the target prices to be set in the 30-day window,” said Carol Skenes, chief of staff at Turquoise Health.
Skenes said pharma companies are currently experiencing pressure from a number of different regulations.
“We anticipate these target prices will add more scrutiny and require pharma companies to engage in more transparent, open dialogue about how they can continue to actively lower the cost of prescription drugs,” Skenes added.
Looking at Other Countries
“The reality is that drug pricing involves complex, multi-year contracts across pharma companies, insurers and pharmacy benefit managers — and those don’t change with the stroke of a pen,” said Brian Whorley, founder and CEO of Paytient.
Trump’s order has left some Americans wondering why they’re paying more for prescriptions than consumers in other countries. According to Evan P. Nadler, a doctor and the founder of ProCare Consultants and ProCare TeleHealth, the biggest problem the U.S. faces is its commitment to capitalism and the free market.
“The reason other countries get better prices is in large part because a single payer system like the National Health Service in the U.K. can negotiate the price for the entire country, unlike in the U.S., where there are private and public insurers all negotiating individually,” Nadler said.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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Sources
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William Soliman, Accreditation Council for Medical Affairs
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Carol Skenes, Turquoise Health
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Brian Whorley, Paytient
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Evan P. Nadler
This article originally appeared on GOBankingRates.com: Will Consumers See Lower Prescription Costs Within 30 Days Thanks to Trump’s New Order? Experts Weigh In
