By the authority vested in me as President by the Constitution and the laws of the United States of America, it is ordered as follows:
Section 1. Policy. Too many Americans struggle to pay for prescription drugs. On average, Americans pay two to three times more than people in other countries for prescription drugs, and one in four Americans who take prescription drugs struggle to pay for their medications. Nearly 3 in 10 American adults who take prescription drugs say they skipped doses, cut pills in half, or did not fill prescriptions because of the cost.
On July 9, 2021, I signed Executive Order 14036 (Advancing Competition in the U.S. Economy), which directed various actions under my administration’s policy to improve competition, raise wages, and reduce the prices of prescription drugs, among other goods and services. In response to Executive Order 14036, the Department of Health and Human Services (HHS) submitted a report to the White House Competition Council calling for bold legislative and administrative action to lower drug prices.
On August 16, 2022, I signed Public Law 117-169, commonly known as the Inflation Reduction Act of 2022 (IRA), which will reduce the cost of prescription drugs and save millions of Americans hundreds or thousands of dollars a year. The IRA will protect Medicare beneficiaries from catastrophic drug costs by phasing in a cap on out-of-pocket pharmacy costs and establishing a monthly cap of $35 per prescription for insulin covered by a Medicare prescription drug plan and insulin delivered by traditional pumps. Starting in January, Medicare beneficiaries with prescription drug coverage will pay $0 out of pocket for recommended adult vaccines (including the shingles vaccine). The IRA will also require certain companies to pay rebates to Medicare if they raise the prices of drugs used by Medicare beneficiaries faster than the rate of inflation. In addition, the Secretary of HHS (Secretary) will be able to negotiate prices for certain high-cost prescription drugs for Medicare beneficiaries for the first time ever. Following the passage of the IRA, HHS took critical steps to quickly implement these landmark provisions to achieve results and reduce health care costs for the American people.
As my administration works to implement the IRA, it is critical that we take additional steps to complete the IRA and further reduce prescription drug costs. Within HHS, the Center for Medicare and Medicaid Innovation (“Innovation Center”) tests health care payment and delivery models to improve the quality of health care and make health care delivery more efficient . In June 2022, the Center for Innovation announced a new model to improve cancer care and reduce healthcare costs for cancer patients, including prescription drug costs. The Center for Innovation provides my administration and the American people with a useful set of tools to help reduce health care costs and improve quality of care, and its work can advance my administration’s ongoing policy of reduce the cost of prescription drugs.
Second. 2. HHS Actions. As part of the policy set forth in Section 1 of this order, the Secretary shall, pursuant to the criteria set forth in 42 USC 1315a(b)(2), consider whether to select for testing by the new center innovation health care payment and delivery models that would reduce drug costs and promote access to innovative drug therapies for beneficiaries enrolled in Medicare and Medicaid, including models that may result in reduced sharing costs for commonly used drugs and support value-based payment that promotes high-quality care. The Secretary shall, no later than 90 days from the date of this Order, submit a report to the Assistant to the President for Domestic Policy listing and describing all models that the Secretary has selected. The report should also include the secretary’s plan and schedule for testing these models. Following submission of the report, the Secretary will take appropriate steps to test all payment and healthcare delivery models discussed in the report.
Second. 3. General provisions. (a) Nothing in this Order shall be construed as impairing or otherwise affecting:
(i) the authority granted by law to an executive department or agency, or its head; Where
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative or legislative proposals.
(b) This order will be enforced in accordance with applicable law and subject to the availability of funds.
(c) This order is not intended to create and does not create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies or entities, officers, employees , or agents, or any other person.
JOSEPH R. BIDEN JR.
THE WHITE HOUSE,
October 14, 2022.