Lowering Prescription Drug Costs for Americans

Executive Order 14087 of October 14, 2022

Lowering Prescription Drug Costs for Americans

By the authority vested in me as President by the
Constitution and the laws of the United States of
America, it is hereby ordered as follows:

Section 1. Policy. Too many Americans face challenges
paying for prescription drugs. On average, Americans
pay two to three times as much as people in other
countries for prescription drugs, and one in four
Americans who take prescription drugs struggle to
afford their medications. Nearly 3 in 10 American
adults who take prescription drugs say that they have
skipped doses, cut pills in half, or not filled
prescriptions due to cost.

On July 9, 2021, I signed Executive Order 14036
(Promoting Competition in the American Economy), which
directed various actions in pursuit of my
Administration's policy to improve competition,
increase wages, and reduce prices for 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 actions to lower drug prices.

On August 16, 2022, I signed Public Law 117-169,
commonly referred to as the Inflation Reduction Act of
2022 (IRA), which will lower the cost of prescription
drugs and save millions of Americans hundreds or
thousands of dollars per year. The IRA will protect
Medicare beneficiaries from catastrophic drug costs by
phasing in a cap for out-of-pocket costs at the
pharmacy and establishing a $35 monthly cap per
prescription for insulin covered by a Medicare
prescription drug plan and insulin delivered through
traditional pumps. Starting this 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 Medicare rebates if
they increase 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 selected high-cost prescription
drugs for Medicare beneficiaries for the first time
ever. Following the passage of the IRA, HHS has taken
critical steps to swiftly implement these historic
provisions in order to deliver results and lower health
care costs for the American people.

As my Administration works to implement the IRA, it is
critical that we take additional actions to complement
the IRA and further drive down prescription drug costs.
Within HHS, the Center for Medicare and Medicaid
Innovation (``Innovation Center'') tests health care
payment and delivery models to improve health care
quality and make the delivery of health care more
efficient. In June 2022, the Innovation Center
announced a new model to improve cancer care and lower
health care costs for cancer patients, including
prescription drug costs. The Innovation Center provides
my Administration and the American people with a useful
set of tools to help lower health care costs and
improve quality of care, and its work can advance the
continued policy of my Administration to lower the cost
of prescription drugs.

Sec. 2. HHS Actions. In furtherance of the policy set
forth in section 1 of this order, the Secretary shall,
consistent with the criteria set out in 42 U.S.C.
1315a(b)(2), consider whether to select for testing by
the Innovation Center new health care payment and
delivery models that would lower

drug costs and promote access to innovative drug
therapies for beneficiaries enrolled in the Medicare
and Medicaid programs, including models that may lead
to lower cost-sharing for commonly used drugs and
support value-based payment that promotes high-quality
care. The Secretary shall, not later than 90 days after
the date of this order, submit a report to the
Assistant to the President for Domestic Policy
enumerating and describing any models that the
Secretary has selected. The report shall also include
the Secretary's plan and timeline to test any such
models. Following the submission of the report, the
Secretary shall take appropriate actions to test any
health care payment and delivery models discussed in
the report.

Sec. 3. General Provisions. (a) Nothing in this order
shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or
the head thereof; or

(ii) the functions of the Director of the Office of Management and Budget
relating to budgetary, administrative, or legislative proposals.

(b) This order shall be implemented consistent with
applicable law and subject to the availability of
appropriations.
(c) This order is not intended to, 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, its officers, employees, or agents, or any
other person.

THE WHITE HOUSE,

October 14, 2022.