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On July 9, 2021, President Biden issued an Executive Order (EO) on Promoting Competition in the American Economy where he seeks to address many facets of the American economy and promote a more competitive marketplace.
One of the primary areas of concern is the healthcare sector. President Biden expressed concerns that Americans are paying too much for prescription drugs and healthcare services, caused in part by hospital consolidations and restrictions within the market for generic drugs and biosimilars that deny access to lower-cost drugs.
The Executive Order states that the Biden Administration will support aggressive legislature reforms that would lower prescription drug prices. Specifically, the Biden Administration would support legislation that allows Medicare to negotiate drug prices, imposes inflation caps, and enacts a public health insurance option.
The Executive Order emphasizes four areas of focus where the Biden Administration believes that lack of competition increases prices and reduces access to quality care. These areas are: prescription drugs, hearing aids, hospitals, and health insurance.
As it pertains to hospitals, the Executive Order encourages the Justice Department and the Federal Trade Commission to review and revise merger guidelines in order to address the consolidation of the industry and ensure that patients are not harmed by such mergers.
Along with seeking to remove barriers and promote competition in the area of mergers and acquisitions, the Executive Order also addresses non-compete agreements which are common in the healthcare industry. More information regarding the status of non-compete agreements under the Executive Order is available here.
The Executive Order provides the Secretary of Health and Human Services with the following tasks:
- Promote wide availability of low-cost hearing aids;
- Support price transparency initiatives such as those made necessary by the No Surprises Act;
- Provide standardized options in the National Health Insurance Marketplace;
- Report with a plan to continue the effort to combat excessive pricing of prescription drugs and enhance pharmaceutical supply chains;
- Lower the prices and improve access to prescription drugs and biologics, including through generic drug and biosimilar competition;
- Help ensure that the patent system does not delay generic drug and biosimilar competition and;
- Reduce the cost of covered products to the American consumer.
Foster Swift’s team of healthcare attorneys will continue to monitor the impact of President Biden’s Executive Order and any newly implemented rules and guidance from the Department of Health and Human Services.
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