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Subject: Background Press Call by Senior Administration Officials on Drug Pricing

The White House
Office of the Press Secretary
July 25, 2020

Via Teleconference

4:41 P.M. EDT

MODERATOR: Good evening, everyone. Thank you for joining the briefing call on the executive order that the President just signed on drug pricing. We will -- we’ll immediately open the call up to question and answer.


Here with me to answer your questions is Secretary Alex Azar, the United States Secretary of Health and Human Services; Seema Verma, Administrator of the Centers for Medicare and Medicaid Services; and Mr. Tom Engels, Administrator at the HRSA.

We’ll go right into Q&A. Operator, you may begin.

Q Hi. Yamiche Alcindor with PBS NewsHour. I wanted to ask about the -- what the actual effect will be of this (inaudible) going forward, and whether or not there is any talk of whether or not there’s going to be a healthcare plan that’s going be working with congressional Republicans, given that a more robust healthcare plan would have to go through Congress?


SECRETARY AZAR: Could you repeat the -- (inaudible) apart when you were asking what the effect would be and the -- you broke up. Do you mind repeating that?

Q Yeah, so the first part of my question was: Can you talk a little bit about what the everyday effects will be of the executive order?


And the second question is: Is there any talk of a timeline for when a robust healthcare plan that includes congressional Republicans, something that would go through Congress -- whether or not there is a timeline on what -- whether or not a healthcare plan like that will be developed?

SECRETARY AZAR: Um, sure. So, in terms of the effects on people, the importation -- the individuals will be able to get prescription drugs that -- under one of the programs; the one that Governor DeSantis has taken the lead on -- that states and tribes would set up regimes to be able to import drugs safely from Canada. That does not include what are called “biologics” or injectable or controlled substances products under the -- under statute. And so that is one element.


The other element is the re-importation of insulin from Canada. So, a lot of insulin is made here in the United States, sent to Canada, sold at a much lower price. This would allow a safe mechanism for the re-importation of insulin from Canada at that lower price for individuals.

And then the third would be a regime that FDA would set up for what's called “personal importation,” where individuals could get their drugs imported from other countries that the FDA will set up a system that would allow the safe importation from systems that have comparable regulatory regimes, where FDA would find that to be safe.


In terms of HRSA’s program, I’ll ask Mr. Engels to talk about that -- about the community health center program.

ADMINISTRATOR ENGELS: Yeah, it will affect about 1,000 of the health centers that are currently participating in 340B program. Patients that use those centers for insulin or epinephrine will be able to have those savings passed on to them at the centers keeping that funding.


SECRETARY AZAR: And, Administrator Verma, would you like to talk to the most favored nations -- that (inaudible)?

ADMINISTRATOR VERMA: Sure. Sure. In the Part B program, it’s important to understand that the government is just a price taker. Pharma manufacturers can charge whatever they want and the taxpayers have to bear the bill, and those costs are also borne by American seniors as well in the Medicare program.


The President made the point that he's willing to talk to pharma, gave them the deadline of August 24th. And so, we’ll see what those discussions indicate, but the agency is prepared to move forward.

SECRETARY AZAR: And then on the -- the fourth item, which is the rebate -- the rebate rule: The drug companies currently pay approximately $150 billion in undisclosed kickbacks to middlemen to get formulary status. This rule would require that those kickbacks be passed through to our seniors when they walk into the pharmacy. Those average about 26-30 percent, in terms of the discount. And that’ll work out to be about $30 billion per year of savings to seniors who buy drugs at the pharmacy.


Q And is there a timeline for when a congressional healthcare plan is going to be --

SECRETARY AZAR: But we’re -- we’re not talking about -- we’re just -- today, we’re going to focus on the drug -- the four executive orders on drug pricing and not the various elements of any kind of health plan.


Q Okay. Thank you so much.

MODERATOR: Operator, we’ll take the next question, please.

Q Yeah. This is Anthony (inaudible). Thanks for taking my call. Now, I heard you say that they're going to lower the price of insulin. But under this new plan that goes in effect on the 24th of August, will it actually effect the prices of the (inaudible) as well as the (inaudible) that diabetes -- that diabetics have to have (inaudible).


SECRETARY AZAR: So, Administrator Verma?

ADMINISTRATOR VERMA: Yeah, to -- to clarify, for insulin -- I think Mr. Engel will talk about, sort of, the insulin. But I want to talk about it in terms of the Medicare program. That insulin is provided through our Part D program. And in that particular program, through the Seniors Saving Model that we've already announced, seniors will be paying $35 for their insulin. They can pick a plan starting in this year’s open enrollment, and that’ll become effective next year.


In terms of the most favored nation executive order, that’s actually going to impact our Medicare Part D drugs, and those are physician-administered drugs, so insulin is not typically -- won’t be impacted in that program, but I defer to Mr. Engels to talk about the -- your insulin program.

ADMINISTRATOR ENGELS: And the insulin program, again, would be discounts through the 340B program that have -- dramatically reduces the price for -- that a health center will be able to purchase that medication and any savings that the health center might save -- realized from that -- would have to be passed on -- would be required to be passed on to the patient, through savings.


MODERATOR: Operator, we will now take the next question.

Q Hi. Thank you. I wanted to ask about the most favored nation portion. Was the idea you were -- you were initially going to sign it, that it would be implemented immediately? But it sounds like the President was saying then, you know, pharma executives objected, and so you're going to give them a chance? I mean, is -- obviously they -- their solutions are going to be very different than this.


So, I guess I wonder, you know: Do you imagine -- how do you imagine there is going to be some deal made with pharma or do you think you're likely to still end up going through with this? Or can you just explain that a bit?

And also, is this going to be a proposed rule or a final rule on the most favored nation if it goes into effect? Thanks.


SECRETARY AZAR: So, yeah. So, on the most favored nations, the President has instructed us to move forward. We’ll -- we’ll continue with operational planning to implement that.

But he's -- and he has signed the executive order. And he, though, has said to the drug industry that they have 30 days to come forward with a comprehensive plan to end foreign freeriding and achieve the objectives of the most favored nation plan.


If they do not like MFN, they need to come forward with an approach that could substitute for that, that would achieve the goal the President has laid out for the benefit of the American people and the Medicare program. If they do that, then he’ll consider not implementing; and if not, we will move forward.

We’ll be discussing at a later date the vehicles -- procedural vehicles for how that would happen.


MODERATOR: Operator, we’ll take one more question, please.

Q Hey there. This is Mary Ellen with CQ Roll Call. Thanks for doing this. I wanted to ask, kind of, broadly: A lot of these policies -- everyday policy, drug importation, (inaudible) model -- these are polices that the administration has previously put forward. Can you talk a little bit about, you know, the point of having these executive orders today, as opposed to, you know, moving forward with more proposed or final rules -- what you previously offered?


SECRETARY AZAR: So what the President did today is, through executive order, make clear that these are the policies of his administration. These will happen; he has ordered them to happen. Debate is over. They will occur, and so it’s a commission, as with all executive orders across the executive department, to ensure alignment and make sure that we implement according to his directives.

MODERATOR: Okay, Operator, we will now end the question-and-answer session.

Thank you, everyone, for joining the call. Again, all these remarks were on the record. And, as always, you can direct further questions to the White House Press Office. Have a good night and a great weekend.


END 4:51 P.M. EDT


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