(NewsNation) — Food and Drug Administration Commissioner Martin Makary believes President Donald Trump’s executive order on drug costs will give the United States a “level playing field.”
The surgical oncologist said on Monday he believes that the idea of implementing a “most favored nation” policy will be transformative, though critics warn it could threaten access to some treatments or make the nation reliant on others for medicine.
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The president’s plan, which he referred to as a “most favored nation” policy, would shift prescription costs in the U.S. based on what other countries are paying.
Essentially, prices would be capped at the same cost seen in other “wealthy” countries, Makary told NewsNation.
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Drugmakers face a 30-day deadline to broker a lower price for some of their prescriptions.
“We’re asking companies to voluntarily give us the same best price in wealthy countries that they offer elsewhere,” Makary said. “But we also are keeping reserving the right to use the full regulatory and policy power of this administration to make it happen.”
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Detractors, like PhRMA president and CEO Stephen J. Ubl, warn that the policy is a “bad deal for American patients.”
“Importing foreign prices will cut billions of dollars from Medicare, with no guarantee that it helps patients or improves their access to medicines. It jeopardizes the hundreds of billions our member companies are planning to invest in America, making us more reliant on China for innovative medicines,” Ubl said in a statement.
Makary countered that higher prescription prices also serve to prevent access.
Which drugs could see cost cuts?
Makary said “new drugs, the drugs on patent, the drugs with market exclusivity, the biologic drugs that have commercials where people are always dancing and singing” are possible medications that could see their sticker value slashed.
He did not mention any specific brands or medicines, telling NewsNation the order will address “all drugs where there’s a significant disparity in price overseas from the United States.”
Biologic drugs — made from biological sources — can include vaccines, gene therapies and more.
“I think the beauty of it is that it is broad,” Makary added.
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It’s unclear what, if any, impact the Republican president’s executive order will have on millions of Americans who have private health insurance. The federal government has the most power to shape the price it pays for drugs covered by Medicare and Medicaid.
The federal government spends hundreds of billions on prescription drugs, injectables, transfusions and other medications every year through Medicare, which covers nearly 70 million older Americans.
Medicaid, meanwhile, covers nearly 80 million poor and disabled people in the U.S. Republicans introduced legislation late Sunday that would cut Medicaid spending significantly as part of Trump’s massive tax bill.
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Makary said he and other health leaders have been working for the last two weeks to change the inspection process overseas.
“We are moving from scheduled inspections of foreign pharma manufacturing plants to unannounced surprise inspections, because, in my opinion, a scheduled inspection overseas is no inspection,” Makary said.
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He added that the administration has also floated the idea of allowing states to import drugs from other countries: “There’s a precedent for that, and that’s something that’s on the table as well.”
The Associated Press contributed to this report.
