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Biden Order Targets High Prescription Drug Prices

Calls for safe importation of medicines and a comprehensive plan to lower medication costs

a woman is putting a pill in her hand

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En español | The Biden administration is taking aim at high prescription drug prices with a July 9 executive order that directs federal agencies to safely import medicines from Canada and urges banning a practice that makes it more difficult for generic drugs to get to consumers.

The order also gives the Department of Health and Human Services (HHS) 45 days to issue a comprehensive plan “to combat high prescription drug prices and price gouging."

The prescription drug initiatives are part of a sweeping executive order designed to promote competition in the American economy. The fact that Americans pay 2 1/2 times as much for the same prescription drugs as people in other countries do is a result, the administration says, of a “lack of competition among drug manufacturers.”

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A White House fact sheet outlining the order says pharmaceutical companies have been able to use their market power to amass annual profits far higher than nondrug companies.

"AARP is encouraged by today's Executive Order calling for swift and real action to reduce prescription drug prices,” Nancy LeaMond, AARP executive vice president and chief advocacy and engagement officer, said in a statement issued soon after President Biden signed the executive order. Through its “Fair Rx Prices Now” campaign, AARP is urging Americans to contact their federal and state representatives to demand laws that would lead to lower prescription drug prices.

"Americans can't afford to pay more than 3 times what people in other countries pay for the same medicine,” LeaMond says. “People shouldn't have to choose between buying medicine and paying for food or rent.”

A recent AARP survey showed that Americans age 50 and older overwhelmingly support measures to tackle high drug prices, including allowing Medicare to negotiate prices for prescription drugs and preventing drug companies from charging higher prices in the U.S. than they do in other countries.

Health care initiatives

The executive order includes these health care elements:

  • Drug importation. The U.S. Food and Drug Administration (FDA) is directed to work with states to safely import drugs from Canada. The Medicare Modernization Act of 2003 gave the federal government that power, and HHS issued a regulation in 2020 to allow drug importation, but so far that rule has not been implemented. A number of states — Colorado, Florida, Maine and Vermont — have passed laws to allow drug importation.
  • Generic and biosimilar drugs. HHS is directed to increase support for these lower-cost options for patients. The order also encourages the Federal Trade Commission to ban so-called “pay for delay” agreements. Under these arrangements, brand-name drug companies limit the availability of lower-priced versions of their medications by paying generic drug companies not to produce a competing product.
  • Hearing aids. Although Congress passed bipartisan legislation in 2017 allowing hearing aids to be sold over the counter, the FDA has not issued regulations allowing them to be sold without a prescription. The order says the agency must issue such a proposed regulation within 120 days.

Dena Bunis covers Medicare, health care, health policy and Congress. She also writes the “Medicare Made Easy” column for the AARP Bulletin. An award-winning journalist, Bunis spent decades working for metropolitan daily newspapers, including as Washington bureau chief for the Orange County Register and as a health policy and workplace writer for Newsday.

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