Current Events Industrial Organization Pharmaceuticals Public Policy

Biden’s Executive Order on Promoting Competition in the American Economy: What does it say about health care?

Last Friday, President Biden released an executive order titled “Promoting Competition in the American Economy” While the order talk about transportation, internet companies, and farming, there were a number of provisions related to health care. I summarize each of these below. Specifically I review

  • OTC hearing aids. Currently, many patients need to visit a doctor to get a hearing aid. Biden’s executive order requires HHS to publish a proposed rule on making over-the-counter (OTC) hearing aids available.
  • Hospital price transparency. Biden call for more price transparency for hospitals, other providers and insurers. He calls on price transparency in part because of the “No Surprises Act“, which prohibits balance billing for employer-sponsored and commercial health plans (Medicare and Medicaid already have de facto bans on balanced billing).
  • Standardizing options in the Health Insurance Marketplace. To allow consumers to better compare across health plans in the “Obamacare” exchanges, Biden calls for more standardization. Standardization is helpful for better comparison shopping but harmful in terms of consumer choice.
  • Lowering drug prices and Medicare drug price negotiation. The executive order calls on various government entities to (i) combat excessive prices and (ii) enhance domestic pharmaceutical supply chains. The executive order aims to address the problem of “price gouging” but this term is not clearly defined. It also supports legislative action to allow Medicare to negotiate prescription drug prices.
  • Biologics and generics. Biden wants to facilitate generic drug and biosimilar entry by (i) making generic and biosimilar drug approval more transparent and predictable, (ii) allow for interchangability of biologic and biosimilar drugs, including making Medicare and Medicaid provide equivalent reimbursement for biologics and biosimilars, (iii) to work with other agencies to stop rules that “unjustifiably delay generic drug and biosimilar competition”. Note that “unjustifiably” is not defined. The action also calls for supporting the continued implementation of the CREATES Act of 2019. The executive order also mandates that the FTC Chair should work to use rulemaking around areas such as “unfair anticompetitive conduct or agreements in the prescription drug industries, such as agreements to delay the market entry of generic drugs or biosimilars”
  • Drug importation. The executive order calls on the FDA to work with States and Indian Tribes to develop section 804 drug importation programs. My thoughts on the feasibility of drug importation can be found here, here, and here.

It certainly will be interesting to see how these proposals are implemented in practice.

Leave a Reply

Your email address will not be published. Required fields are marked *