Throughout his term, President Donald Trump has signed a series of health care executive orders attempting to accomplish goals long sought by members of both parties.
In 2020 alone, Trump has signed orders mandating drug price transparency, allowing Americans to purchase and re-import drugs from Canada and mandating Medicare drug purchases match the lowest comparable cost paid by other developed nations.
In October, the Trump administration signed an order requiring health insurers to disclose costs upfront, allowing millions of Americans access to drug and treatment prices before purchasing them.
“With more than 70% of the most costly health care services being shoppable, Americans will have vastly more control over their care,” Health and Human Services Secretary Alex Azar said when the order was signed.
Though advocates for the measure said it would force market-driven competition, allowing Americans more choices at lower costs, opponents have cautioned that mandatory price transparency could counterintuitively stifle competition and raise prices as a result.
“Two-thirds of bankruptcies are health care related,” advocate Cynthia Fisher told the Daily Caller News Foundation in October, adding that Americans’ understanding of the costs of their health care decisions is “so important, particularly in a time of COVID, uncertainty and economic hardship.”
Dr. Robert Graboyes, a senior research fellow at the Mercatus Center, expressed skepticism that Trump’s order would actually lower prices.
“In markets with only a few competitors” — common in healthcare, he says — “mandatory transparency could harm consumers by pushing prices upward, rather than downward, by a process known as ‘tacit collusion,’” he said.
“Three simultaneous circumstances are necessary for tacit collusion: a small amount of sellers, high barriers to becoming a health care provider, and mutual knowledge of pricing. The first two are already a part of the sector.”
Trump also signed an order in September allowing Americans to import drugs from Canada, whose drug prices are often lower. However, HHS has so far been unable to estimate how much Americans may save because it does not know which drugs will be imported, and the order prevents the importation of critical biologics like insulin.
Canada’s drug prices are lower than the United States’ in part because the government mandates how expensive drugs can be under its Controlled Drugs and Substances Strategy.
The order was a long-sought goal by non-establishment politicians in both parties. In 2019, Trump and House Democrats began working on a bipartisan bill to lower drug prices, and that summer Vermont Democratic Sen. Bernie Sanders joined a bus filled with diabetics that crossed into Canada from Detroit to purchase insulin at lower prices. (RELATED: Sanders And Trump Could Be Unlikely Allies On Drug Prices)
Last week, Trump signed another order seeking to lower drug prices for Americans on Medicare and Medicaid. The order adopts the Most Favored Nation model, which mandates that the two government health care programs pay no more for specific drugs than the lowest price charged to other developed nations.
“The Most Favored Nation Model will be the most significant single action any administration has ever taken to lower American drug costs,” Azar said during Friday’s announcement.
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