Lowering Drug Costs (E.O. 14087)

Summary

Tells the health department to find and test new ways to lower drug prices for people on Medicare and Medicaid.

What problem does this solve?

Many Americans cannot afford their prescription medicines because they cost two to three times more than in other countries. This order directs the government to test new payment systems to help lower these high costs.

What does this order do?

Directs testing of new payment models

Requires the Secretary of Health and Human Services (HHS) to consider testing new payment and delivery models to lower drug costs for Medicare and Medicaid.

Focuses on the Innovation Center

Specifies that the Center for Medicare and Medicaid Innovation should be used to test these new models.

Requires a report to the White House

Mandates the Secretary of HHS to submit a report within 90 days describing the models selected for testing and a timeline for implementation.

Aims to improve access to new drugs

Encourages models that not only lower costs but also promote access to new and innovative drug therapies for patients.

Who does this affect?

Medicare beneficiaries
Medicaid beneficiaries
Americans who take prescription drugs

What is the real world impact?

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Builds on recent legislation to lower drug costs

Uses the powers of the Center for Medicare and Medicaid Innovation to find more ways to reduce drug prices, complementing the recently passed Inflation Reduction Act.

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Addresses public concern over healthcare costs

Shows the administration is taking further steps to address the high cost of medicine, a major issue for many voters. The order directs the study of new models rather than implementing immediate, concrete changes.

When does this start?

This order sets a specific deadline for the Department of Health and Human Services.

HHS report on new payment models

The Secretary of HHS must submit a report describing new payment models to test within 90 days of October 14, 2022.