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Executive Order on drug pricing includes actions to remove barriers to innovation
The Trump Administration’s Executive Order on drug pricing included numerous directives, including some that may be challenging for biotech and some that address key barriers to innovation.
BIO is still analyzing the potential impact. While there are welcome policies “that will help strengthen American innovation and lead to lower prescription drug costs for patients,” we recognize that not everything in the EO will have a positive effect on the biotechnology industry.
BIO’s initial comments:
Pill penalty: “By calling for a fix to the ‘pill penalty’ (which gives small molecules less price control protections than biologics), the president’s Executive Order takes an important step towards addressing a critical flaw in the Inflation Reduction Act.”
Pharmacy benefit managers and hospitals: “The Executive Order will also help address abuses by middlemen and large hospitals that are driving up the cost of medicines for everyone. We are hopeful this is the first step to simplify the system and address policies that hinder biotech innovation and undermine access to medicines for American patients and families.”
Work to do: BIO will continue to work with lawmakers to implement policies that lower cost for patients and remove barriers that adversely impact our innovation ecosystem.
Commerce Dept. investigation lays ground for pharma tariffs
The U.S. Department of Commerce issued a public notice announcing a “232 investigation” that is a precursor to expected tariffs on pharmaceuticals.
What it is: The investigation, under Section 232 of the Trade Expansion Act, is meant to determine the effects of pharmaceuticals and pharmaceutical ingredients on U.S. national security, according to the announcement.
Why it matters: President Trump said tariffs would encourage more drug manufacturing in the U.S. Last year’s BIO member survey found that reshoring or “friend-shoring” manufacturing could take eight years. BIO’s survey last month showed tariffs would threaten our national security, harm investment, cause disruption in our supply chains, and reduce patient access to medicine.
The impact: 94% of biotech firms anticipate surging manufacturing costs from tariffs on the EU, while tariffs on Canada and China would have a similar impact. “More than 50% of biotech firms predict ‘increased difficulty’ in funding and conducting research if EU tariffs are enacted,” the survey found.
BIO’s recommendations to secure the U.S. supply chain and ensure America remains the global leader in medical innovation:
- Expedite regulatory pathways to accelerate the approval of life-saving treatments.
- Strengthen capital formation to fuel the next generation of biotech breakthroughs.
- Protect and advance strong IP rights, the foundation of America’s innovation.
BIO’s view: “Re-onshoring key parts of the biotechnology supply chain to the U.S. and our allies and strengthening the American manufacturing base should be a high priority for both national and economic security. It will take years, though, for this shift and we need to be mindful of the negative consequences of these proposed tariffs,” according to BIO President & CEO John F. Crowley.
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