The impact of this Executive Order is varied with potential affordability gains for Black Medicare beneficiaries and patients needing medications to manage chronic diseases (e.g., diabetes, and cardiovascular disease). Low-income, uninsured and underinsured payments may benefit from 340B discounts for lifesaving drugs (e.g., insulin, epinephrine) where current cost barriers exist. Medicaid beneficiaries engaged in Value-Based Care (VBC) payment programs, for example, may benefit from rebates and other efficiency measures. The equity risks rest with patients receiving care at community health centers and Federally Qualified Health Centers (FQHCs) that must continue to offer medications at steep discounts without dedicated funding to cover funding gaps, placing significant financial burden on critical safety-net providers. Hospitals, particularly rural hospitals, dependent on 340B savings may experience similar financial challenges. While EO 14273 has potential to reduce costs for some patients, safety-net providers and rural hospitals may experience negative financial impact potentially contributing to service reductions, and potential clinic and hospital closures. Proposed tariffs could increase the cost of imported pharmaceuticals, negating the order's intended benefits.
A directive issued by the President that manages operations of the federal government. Executive orders have the force of law but must align with existing statutes and constitutional authority.
Who It Impacts: Federal agencies and employees, directing them on how to implement laws or carry out government functions. Executive orders can also influence businesses and individuals when they relate to issues like immigration, trade, or labor policies.
Who Is Not Impacted: Private citizens and businesses do not have to directly follow an executive order unless it leads to regulations or policies that apply to them. For example, an executive order directing federal agencies to increase renewable energy use does not mandate action from private companies, but it may influence policy shifts that eventually affect them.
Summary
EO 14273 directs the Department of Health and Human Services to leverage federal purchasing power and regulation to lower prescription drug prices to shift costs from patients and taxpayers. The EO includes several mechanisms to achieve this directive including directing HHS to issue new guidance for the Medicare Drug Price Negotiation Program for specific drugs and biologics, develop new pricing models for high-cost drugs, survey hospital pharmaceutical costs to align with Medicare payments (affecting 340B hospitals), direct HHS and OMB to ensure cost savings measures and test value-based care payment options, increase transparency into Pharmacy Benefit Manager Compensation, direct the FDA to streamline lower cost drug option, and assess current pharmaceutical payment incentive practices.
Impact Analysis
Legal Challenges
N/A
Take Institutional Action
340B Hospitals and Health Systems
Prepare OPPS Drug Acquisition Cost Survey to ensure pharmaceutical costs are captured accurately.
Community Health Centers and FQHCs
Document financial impacts of administering high-cost drugs and partner with advocacy groups to educate policy makers and identify funding sources to cover financial gaps.
.png)
