U.S. President Donald Trump has signed a broad executive order directing drugmakers to cut medicine prices to match those charged in other countries.
The order gives drugmakers price targets in the next 30 days and warns of further action to lower prices if companies do not make "significant progress" toward those goals.
Investors, analysts, and drug pricing experts said the order was not as severe as feared and questioned how it would be implemented.
Trade groups representing biotech and pharmaceutical companies decried the move.
"Importing foreign prices from socialist countries would be a bad deal for American patients and workers. It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America," Stephen Ubl, CEO of industry trade group PhRMA, said in a statement.
Ubl said the real reasons for high drug prices are "foreign countries not paying their fair share and middlemen driving up prices for U.S. patients.
The order also directs the U.S. Federal Trade Commission to consider aggressive enforcement against what the government calls anti-competitive practices by drugmakers.
During a briefing, a White House official pointed to tactics the pharmaceutical industry uses to prevent competition, such as deals with generic companies to delay market entry of cheaper alternatives, as enforcement targets.
'A FLOOD OF LITIGATION'
The executive order is likely to face legal challenges, particularly for exceeding limits set by U.S. law, including on imports of drugs from abroad, said health policy lawyer Paul Kim. "The order's suggestion of broader or direct-to-consumer importation stretches well beyond what the statute allows."
Such challenges are likely months away, and will come after the Trump administration takes more concrete action to force companies to lower prices instead of the “scattershot threats” included in the executive order, according to Lawrence Gostin, a professor of health law at Georgetown Law.
“At the point when there are actual consequences and we know what they are, and when companies feel that they have to lower the price of their drugs, at that point we're going to have a flood of litigation,” Gostin said.
The Federal Trade Commission has a long history of antitrust enforcement actions against drugmakers and other healthcare companies. Trump last month ordered the FTC to coordinate with other federal agencies to hold listening sessions on anticompetitive practices in the drug industry.
On Monday, Trump was expected to ask the FTC to consider taking enforcement action, sources said.
"President Donald Trump campaigned on lowering drug costs and today he’s doing just that. Americans are tired of getting ripped off. The Federal Trade Commission will be a proud partner in this new effort," said FTC spokesperson Joe Simonson.
Analysts said the order did not contain the kinds of detailed plans for price cuts that would raise concerns.
"Implementing something like this is pretty challenging. He tried to do this before and it was stopped by the courts," said Evan Seigerman, analyst at BMO Capital Markets.
Trump's order directs the government to consider facilitating direct-to-consumer purchasing programs that would sell drugs at the prices other countries pay.
It also orders the Secretary of Commerce and other agency heads to review and consider actions regarding the export of pharmaceutical drugs or ingredients that may contribute to price differences. The Commerce Department did not immediately respond to a Reuters's request for comment.
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