Trump Signs Executive Order on Medicare, but No Movement on International Price Index Yet

President Donald Trump has signed an executive order on improving Medicare.

Speaking at the retirement center The Villages in Sumpter County, Florida, Trump said on Thursday that the order, titled “Protecting and Improving Medicare for Our Nation’s Seniors,” delivers on his campaign promise to defend the Medicare program.

“I made you a sacred pledge that I would strengthen, defend Medicare,” said Trump, and suggested that he was making good on his promise by signing “a very historic executive order” to ensure that Medicare “will never be taken away from you. We’re not letting anyone get close.”

The order itself claims that Democrats’ proposals to institute a “Medicare for All” system, which Trump called a “threat like never before,” would strip seniors of their choices and harm beneficiaries. “Instead of ending the current Medicare program and eliminating health choices for all Americans, my Administration will continue to protect and improve Medicare by building on those aspects of the program that work well, including the market-based approaches in the current system,” the order reads.

To achieve those goals, within 1 year, HHS will propose a regulation that will make it easier to obtain Medicare Medical Savings Accounts and include a payment model that adjusts Medicare Advantage (MA) benefits to allow beneficiaries to share in savings from the program through rebates. HHS Secretary Alex Azar will be required to outline an approach to changing Medicare fee-for-service (FFS) payments to more closely align with prices paid in MA, to propose regulation to give beneficiaries more access to providers and plans, and to propose regulations that will reduce burdens on providers and ensure appropriate reimbursement.

The order also calls for providing seniors with more information about healthcare quality and cost, eliminating waste and combatting fraud, and transitioning toward “true market-based pricing” in the FFS Medicare program, which will involve shared savings and competitive bidding.

In his remarks, Trump said that his administration is “lowering the cost of prescription drugs, taking on the pharmaceutical companies,” yet notably, the executive order did not include a provision to implement the administration’s proposed international price index (IPI) to reduce drug costs in Medicare.

In 2018, the administration released a plan to allow CMS to set prices for some drugs, including biologics and biosimilars, using prices paid in other countries as external references. While some stakeholders voiced concerns about the IPI model, the proposal did garner rare bipartisan interest, and in her own plan to lower drug prices for Medicare, House Speaker Nancy Pelosi, D-California, proposed a similar model that would cap drugs’ prices at 1.2 times the average selling price in Australia, Canada, France, Germany, Japan, and the United Kingdom. Also included in Pelosi’s plan is authorizing HHS to negotiate prices for up to 250 drugs that lack genereic or biosimilar competition.