Recent federal drug pricing measures might not lower costs — here's why

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The executive order President Joe Biden signed July 9 promises to lower drug prices, but policy experts have expressed doubt that such pledges will come to fruition, Kaiser Health News reported July 19.

The executive order directs the FDA to work with states and tribal programs to import prescription drugs from other countries, particularly Canada. Several drug pricing experts told Kaiser Health News that drug importation is unlikely to happen, as other countries are not interested in allowing the U.S. to import their drugs.

In addition to its drug importation guidance, the order asks the Federal Trade Commission to ban "pay for delay" agreements, under which makers of brand name drugs pay generic drugmakers to keep out of a market. It also calls on HHS to increase support for generic and biosimilar drugs and to create a plan within 45 days to address high drug prices and price gouging.

When campaigning, President Biden pledged to lower drug costs by 60 percent. Drug pricing experts told Kaiser Health News lowering drug costs by that much would require congressional legislation.

Once the 45 days pass, experts will know more about the plan and have a better idea of its potential to lower drug costs. But for now, they're doubtful the plan will deliver significant savings for Americans.

"[T]he most disruptive drug pricing reforms — those that could even sniff that kind of price reduction — are also the most unlikely to pass,”  Benedic Ippolito, PhD, a senior fellow in economic policy studies at the American Enterprise Institute said. "In short, I suspect that this executive order isn’t going to make much headway."

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