[Federal Register Volume 85, Number 185 (Wednesday, September 23, 2020)]
[Presidential Documents]
[Pages 59649-59650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-21129]


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  Federal Register / Vol. 85, No. 185 / Wednesday, September 23, 2020 / 
Presidential Documents  

[[Page 59649]]


                Executive Order 13948 of September 13, 2020

                
Lowering Drug Prices by Putting America First

                By the authority vested in me as President by the 
                Constitution and the laws of the United States of 
                America, it is hereby ordered as follows:

                Section 1. Purpose. Americans pay more per capita for 
                prescription drugs than residents of any other 
                developed country in the world. It is unacceptable that 
                Americans pay more for the exact same drugs, often made 
                in the exact same places. Other countries' governments 
                regulate drug prices by negotiating with drug 
                manufacturers to secure bargain prices, leaving 
                Americans to make up the difference--effectively 
                subsidizing innovation and) lower-cost drugs for the 
                rest of the world. The Council of Economic Advisers has 
                found that Americans finance much of the 
                biopharmaceutical innovation that the world depends on, 
                allowing foreign governments, many of which are the 
                sole healthcare payers in their respective countries, 
                to enjoy bargain prices for such innovations. Americans 
                should not bear extra burdens to compensate for the 
                shortfalls that result from the nationalized public 
                healthcare systems of wealthy countries abroad.

                In addition to being unfair, high drug prices in the 
                United States also have serious economic and health 
                consequences for patients in need of treatment. High 
                prices cause Americans to divert too much of their 
                scarce resources to pharmaceutical treatments and away 
                from other productive uses. High prices are also a 
                reason many patients skip doses of their medications, 
                take less than the recommended doses, or abandon 
                treatment altogether. The consequences of these 
                behaviors can be severe. For example, patients may 
                develop acute conditions that result in poor clinical 
                outcomes or that require drastic and expensive medical 
                interventions.

                In most markets, the largest buyers pay the lowest 
                prices, but this has not been true for prescription 
                drugs. The Federal Government is the largest payer for 
                prescription drugs in the world, but it pays more than 
                many smaller buyers, including other developed nations. 
                When the Federal Government purchases a drug covered by 
                Medicare--the cost of which is shared by American 
                seniors who take the drug and American taxpayers--it 
                should insist on, at a minimum, the lowest price at 
                which the manufacturer sells that drug to any other 
                developed nation.

                Sec. 2. Policy. (a) It is the policy of the United 
                States that the Medicare program should not pay more 
                for costly Part B or Part D prescription drugs or 
                biological products than the most-favored-nation price.

                    (b) The ``most-favored-nation price'' shall mean 
                the lowest price, after adjusting for volume and 
                differences in national gross domestic product, for a 
                pharmaceutical product that the drug manufacturer sells 
                in a member country of the Organisation for Economic 
                Co-operation and Development (OECD) that has a 
                comparable per-capita gross domestic product.

                Sec. 3. Payment Model on the Most-Favored-Nation Price 
                in Medicare Part B. To the extent consistent with law, 
                the Secretary of Health and Human Services shall 
                immediately take appropriate steps to implement his 
                rulemaking plan to test a payment model pursuant to 
                which Medicare would pay, for certain high-cost 
                prescription drugs and biological products covered by 
                Medicare Part B, no more than the most-favored-nation 
                price. The model would test whether, for patients who 
                require pharmaceutical treatment, paying no more than 
                the most-favored-nation price would mitigate poor 
                clinical outcomes and increased expenditures associated 
                with high drug costs.

[[Page 59650]]

                Sec. 4. Payment Model on the Most-Favored-Nation Price 
                in Medicare Part D. To the extent consistent with law, 
                the Secretary shall take appropriate steps to develop 
                and implement a rulemaking plan, selecting for testing, 
                consistent with section 1315a(b)(2)(A) of title 42, 
                United States Code, a payment model pursuant to which 
                Medicare would pay, for Part D prescription drugs or 
                biological products where insufficient competition 
                exists and seniors are faced with prices above those in 
                OECD member countries that have a comparable per-capita 
                gross domestic product to the United States, after 
                adjusting for volume and differences in national gross 
                domestic product, no more than the most-favored-nation 
                price, to the extent feasible. The model should test 
                whether, for patients who require pharmaceutical 
                treatment, paying no more than the most-favored-nation 
                price would mitigate poor clinical outcomes and 
                increased expenditures associated with high drug costs.

                Sec. 5. Revocation of Executive Order. The Executive 
                Order of July 24, 2020 (Lowering Drug Prices by Putting 
                America First), is revoked.

                Sec. 6. General Provisions. (a) Nothing in this order 
                shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or 
the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget 
relating to budgetary, administrative, or legislative proposals.

                    (b) This order shall be implemented consistent with 
                applicable law and subject to the availability of 
                appropriations.
                    (c) This order is not intended to, and does not, 
                create any right or benefit, substantive or procedural, 
                enforceable at law or in equity by any party against 
                the United States, its departments, agencies, or 
                entities, its officers, employees, or agents, or any 
                other person.
                
                
                    (Presidential Sig.)

                THE WHITE HOUSE,

                    September 13, 2020.

[FR Doc. 2020-21129
Filed 9-22-20; 8:45 am]
Billing code 3295-F0-P