Electronic Health Reporter

By Ken Perez, vice president of healthcare policy and government affairs, Omnicell, Inc.

On July 9, President Joe Biden issued a wide-ranging executive order (EO), “Executive Order on Promoting Competition in the American Economy,” that is highly critical of big business and advocates policy and regulatory changes to spur competition in seven areas: labor markets, healthcare, transportation, agriculture, internet services, technology, and banking and consumer finance. The EO has been described as the centerpiece of a new Democratic Party emphasis on restraining the nation’s most powerful companies, bolstering and consolidating the federal government’s power.

Of course, as with all presidential EOs, the EO by itself does not impose new requirements on the business community; rather, federal agency-driven policy changes, formal rulemaking or passage of legislation by Congress are required. Moreover, an EO can be easily overturned by a new president, as Biden has done with several Trump-era EOs.

Healthcare Proposals

The EO tackles four areas in healthcare where the Biden administration contends that lack of competition increases prices and reduces access to quality care: prescription drug prices, hearing aids, hospitals, and health insurance. In accord with the status of the high cost of prescription drugs as the public’s top healthcare-related concern, three-fourths of the EO’s healthcare verbiage is devoted to this area, with only brief paragraphs addressing the other three. Here are the specific proposals in the EO for the four areas.

Prescription Drugs

• Directs the Food and Drug Administration (FDA) to work with states and tribes to safely import prescription drugs from Canada.
• Directs the Department of Health and Human Services (HHS) to increase support for generic and biosimilar drugs.
• Directs HHS to issue a comprehensive plan within 45 days to combat high prescription drug prices and price gouging.
• Encourages the Federal Trade Commission (FTC) to ban “pay for delay” agreements, in which brand-name drug manufacturers pay generic manufacturers to stay out of the market.

Hearing Aids

• Directs HHS to consider issuing proposed rules within 120 days for allowing hearing aids to be sold over the counter.

Hospitals

• Encourages the Justice Department and FTC to review and revise their merger guidelines to ensure patients are not harmed by such mergers.
• Directs HHS to support existing hospital price transparency rules and to finish implementing bipartisan federal legislation to address surprise hospital billing.

Health Insurance 

• Directs HHS to standardize plan options in the “National Health Insurance Marketplace” (i.e., HealthCare.gov) so people can comparison shop more easily.

Conclusions

With the exception of hearing aids, the other three areas were highlighted previously in the Biden-Sanders Unity Task Force Recommendations of July 2020, the 2020 Democratic Party Platform approved in August 2020, and the Joe Biden for President Campaign Website. Consequently, the proposals in these areas have already been set forth and therefore are unsurprising. Notably, the EO, in an attempt to appear fair minded, targeted not just one, but three of the largest sectors of healthcare—hospitals, health plans, and pharmaceutical companies.

However, it’s clear that brand-name drug manufacturers stand to lose the most from the EO’s proposals. The hospital-related proposals simply reinforce existing rules and laws, so they should have limited impact on hospitals and health systems. And the proposal to standardize plan options in the Affordable Care Act health insurance marketplaces—while certainly making price comparisons easier–arguably could discourage private sector innovation and reduce consumer choice.

Overall, the EO’s healthcare proposals reflect the most moderate of the major policy proposals of the Biden Campaign. Thus, they may portend and help foster a legislative environment more conducive to bipartisan initiatives, at least in the area of healthcare.