The most glaring gaps in the rollout of Trump's drug pricing orders

The Trump administration unveiled four drug pricing executive orders late Friday, but three days later some of the nation’s top drug pricing experts are still trying to piece together what, exactly, the orders are designed to do. They’re rife with policy contradictions and glaring caveats.

Perhaps the most surprising turn of events was Trump’s proclamation that he had supposedly struck a high-profile deal with drug makers: His administration would wait 30 days before finalizing a much-maligned policy tying what Medicare pays for drugs to the prices in other countries. Drug makers, if they wanted to prevent the policy from being put in place, would have to come up with a better idea by August 24 — or the administration would get the ball rolling, Trump warned. 

“The clock starts right now,” Trump said. 

But that ultimatum — and the administration’s other orders — raised far more questions than they provided answers. Here, STAT digs into three of the most puzzling gaps in the drug pricing rollout. 

What exactly are the terms of this deal? And is there really a deal?

It appears not even the government itself understands the terms of the deal Trump says he reached with drug makers. A fact sheet from the Department of Health and Human Services says the order “takes effect in 30 days unless Congress acts.”

That’s a much different standard than the one laid out by Trump, who put the industry on the clock. An HHS spokesperson declined to explain to STAT the reason for the discrepancy.

“The President has full authority to decide when and whether the [order] goes into effect," the spokesperson said.  

Adding to the confusion: Trump insisted Friday that his hard negotiating had forced drug makers to ask for a meeting to plead their case and went so far as to say the meeting had been scheduled for today. But yesterday, drug makers pulled out of the meeting. 

Worth noting: The confusion hasn’t stopped the drug industry from pushing back on the international pricing idea. The National Association of Manufacturers, which includes drug makers, launched a six-figure advertising campaign urging the White House to abandon the policy. 

Why would the administration include a loophole in its own rebate policy?

Another one of Trump’s executive orders purported to end drug rebates for most drugs picked up at the pharmacy. But it included a striking caveat: the HHS secretary would have to “confirm” that the order would not raise federal spending or Medicare premiums before enacting it. 

To most policy wonks that seemed like an impossible hurdle to clear: Several government-funded analyses have found that the policy would raise premiums or federal spending. By ignoring those analyses, HHS Secretary Alex Azar could open himself up to a lawsuit that could derail the entire policy.  

It begs the question: Why would an administration include something like this in an executive order? 

STAT posed this question to a handful of drug and insurance industry lobbyists, none of whom could come up with a convincing explanation. Their best guess: The caveat was included to give the Trump administration cover from attacks it’s sure to face from Democrats, insurers, and advocacy groups over pushing a policy that could increase costs for seniors. They say the loophole might allow Azar to combat those arguments by  insisting there are legal guard rails in place preventing the administration from enacting the policy if it would raise prices.

Why is the administration going after community health centers that give away their drugs for free? 

Another one of the orders Trump signed Friday directed Federally Qualified Health Centers — clinics that care for the poor and uninsured and get major discounts on drugs through a program known as 340B — to share the discounts they receive on insulin and EpiPens directly with their patients. But experts say that approach doesn’t make much sense. 

These health centers, after all, are required by law not to charge anyone who makes below the federal poverty line. They use a sliding scale for anyone making below 200% of that line. That raises the question of how many people will actually benefit from the order,  if the most vulnerable patients already are getting their drugs for cheap or even free.

The policy was also a shocking jab at an industry that’s typically been insulated from criticism waged at other parts of the drug discount program, known as 340B. While the Trump administration and drug industry allies have frequently criticized certain hospitals participating in the 340B program for pocketing drug discounts instead of sharing them with patients, those hospitals are not impacted by this order. 

Adam Fein, CEO of the Drug Channels Institute and a frequent critic of 340B hospitals said the executive order “makes no sense” and penalizes the “good guys in 340B” “while letting [the] worst abusers …  off the hook.”