Insight on all four executive orders
Executive Order 1: Pass the discounts from drug companies to their patientsThe first order requires federally funded community health centers to “pass the giant discounts they receive from drug companies on insulin and EpiPens directly to their patients.” These clinics advertise affordable, sliding payment scales for low-income patients. Trump’s leveraging its federal funding to stop them from price-gouging patients. Even if we disagree over whether the government should be funding healthcare at all, we should agree that taxpayer funding shouldn’t go toward picking the pockets of the poor.
Executive Order 2: Safe and legal imports of prescription drugs from Canada and other nationsThe second order will “allow the safe and legal importation of prescription drugs from Canada and other countries where the price for the identical drug is incredibly lower.” Trump usually opposes free trade, but this is a step in that direction, and it’s the RIGHT direction. The US government shouldn’t artificially jack up drug prices by restraining trade across borders.
Executive Order 3: Eliminate market incentives for negotiating PBMs, insurers and pharmaceutical companiesThe third order — which Pipes opposes — eliminates market incentives for pharmacy benefit managers who negotiate drug prices between insurers and pharmaceutical companies. Trump, decrying them as parasitical “middlemen,” hath decreed that they may not accept “rebates” from drug companies for successfully negotiating deals. Yes, these “rebates” can create situations in which consumers ultimately pay more for drugs. They incentivize benefit managers to negotiate bigger paychecks for themselves instead of lower prices for patients. But that’s an issue for market actors — pharmaceutical companies, insurers, pharmacies, and consumers — not the government, to tussle over.
Executive Order 4: Medicare negotiation rights on drug pricesThe fourth order brings us back to the same territory as the first: Taxpayer money versus drug pricing. It would require Medicare, the US government’s healthcare program for senior citizens, to negotiate drug prices based on an “International Pricing Index” reflecting prices in other developed nations. Trump is delaying the implementation of that order pending a counter-proposal from the industry, but it should be a slam-dunk. Medicare, whether one supports its existence or not, is effectively the biggest prescription drug purchasing network in the world. That market power should get its members the lowest, not the highest, prices. Healthcare would be cheaper, better, and more accessible if the government got its nose out of the matter entirely — but failing that, three of these four orders make good sense. They’re also a great litmus test. They tell us who really supports freer markets in healthcare and who just pays lip service to the notion while advocating crony capitalism in service to Big Pharma. Thomas L. Knapp (Twitter: @thomaslknapp) is the director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north-central Florida.
Thomas L. Knapp is the director and senior news analyst for the Garrison Center for Libertarian Advocacy Journalism. Knapp is a journalism veteran of over 35 years and a full-time libertarian writer, editor and publisher since 2000.