Lowering Drug Prices (E.O. 13947)

Summary

Makes sure the U.S. government pays the lowest price for certain drugs that other developed countries pay, helping to lower costs for seniors.

What problem does this solve?

Americans pay the highest prices in the world for prescription drugs, which can make medicine unaffordable. This order requires Medicare to pay no more for certain drugs than the lowest price paid by other wealthy countries.

What does this order do?

Establishes a 'Most-Favored-Nation' price for Medicare

Sets a new policy that Medicare should not pay more for certain prescription drugs than the lowest price paid by any other comparable developed country.

Directs HHS to create a new payment model

Orders the Secretary of Health and Human Services to create and test a new payment system for Medicare Part B to implement the most-favored-nation pricing policy.

Defines the lowest price standard

Defines the 'most-favored-nation price' as the lowest price a drug maker sells a product for in a developed country with a similar economy, after adjusting for volume and GDP.

Addresses unfair pricing for Americans

States that it is unfair for Americans to pay more for the same drugs than people in other countries, effectively subsidizing lower drug costs for the rest of the world.

Who does this affect?

Seniors on Medicare
Pharmaceutical companies
Taxpayers

What is the real world impact?

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Reduces drug costs for seniors

Lowers out-of-pocket expenses for seniors on Medicare Part B by ensuring the government pays the lowest possible price, making necessary medications more affordable.

When does this start?

The Secretary of Health and Human Services is ordered to take immediate steps to implement this policy, starting from July 24, 2020.