By John Tozzi, Madison Muller, and Stephanie Lai
President Donald Trump wants Congress to change a policy that gives certain drugs longer protection from drug price negotiations in Medicare, a fix that could address one of the drug industry’s top complaints with the Biden-era law.
Trump directed his health secretary to work with lawmakers to end the differential treatment for small molecule drugs, typically pills, that face Medicare price negotiations sooner that more complex biologic medications.
The directive came in an executive order Trump signed at the White House Tuesday. The order was light on specifics and included a grab-bag of other health policy goals.
A White House official, who detailed the order before its public release on the condition of anonymity, said the changes to drug price negotiations were aimed at improving on the policies enacted by the Biden administration over Republican opposition, and that they wouldn’t increase Medicare spending.
A change to the so-called pill penalty has been on drug lobbyists’ wish lists for years, but would require Congress to adjust the law. The Inflation Reduction Act makes small molecule drugs face Medicare price negotiations after 7 years on the market, while biologics get 11 years of protection. Companies say the disparity warps incentives for drug development.
In January, Eli Lilly & Co. Chief Executive Officer Dave Ricks told Bloomberg that he and other drugmakers would ask Trump to “fix” certain IRA provisions before negotiating the price of more drugs.
The order also directs the Food and Drug Administration to streamline approvals for generic drugs and biosimilars, or copycat versions of complex biologic medications. It also instructs the FDA to work with states to expand imports of drugs from Canada, the official said.
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