US government department proposes rule to lower drug prices for its citizens

Home/Policies & Legislation | Posted 24/01/2020 post-comment0 Post your comment

The US Department of Health and Human Services (HHS) announced a string of changes in November 2019, including a proposal to lower drug prices for US citizens based on Trump’s ‘most favored nation’ approach.

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The HHS announced in November proposals to align grants regulation with new legislation, non-discrimination laws, and Supreme Court decisions.

The Notice of Nonenforcement informs the public that some regulatory provisions in the HHS grants regulation will not be enforced, because of concerns regarding the prior administration’s implementation of the Regulatory Flexibility Act (which governs the issuance of regulations).

HHS is taking ‘immediate steps‘ to address this problem by publishing a notice of proposed rulemaking to reissue the HHS grants regulation with revisions.

The proposed rule would do the following:
• Require grantees to comply with applicable non-discrimination provisions.
• Provide that HHS complies with applicable Supreme Court decisions in administering its grant programmes.
• Not re-impose the exclusion from allowable costs in grants of penalties due for failing to comply with Individual Mandate of the Affordable Care Act. (Trump has already eliminated the penalty associated for failing to comply with the ACA's individual mandate).
• Reissue the other provisions of the 2016 regulation.

Later in the month, the department proposed a rule based on a ‘most favored nation’ approach, under which the US would pay less than other developed nations for Medicare drugs.

In 2018, the administration proposed using an International Pricing Index to link the prices of drugs in Medicare Part B (which covers services and supplies that are medically necessary to treat a health condition) to their overseas cost.

At a healthcare forum in Washington, HHS Secretary Alex Azar said the administration wants to advance on this approach to reduce costs further for American citizens. The term ‘most favored nation‘ was introduced by President Trump in the summer, when he discussed a possible executive order where the US pays ‘whatever the lowest nation’s price is’.

The rule is currently under review by the White House Office of Management and Budget, which prepares the president’s budget proposal.

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Source: US Department of Health and Human Services

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