Hospital mergers, drug prices and grassroots non-compete covenants are all targets in President Joe Biden’s pen today as he signed an executive order ordering federal departments and agencies to reshape what he called a “booming” economy by prioritizing workers, encouraging higher wages and the possibility of mobility.
Hospital mergers, drug prices and grassroots non-compete clauses are all targets in President Joe Biden’s pen today as he signed an executive order ordering federal departments and agencies to reshape what he called a “booming” economy by prioritizing workers, encouraging higher wages and the possibility of mobility.
The order covers sectors ranging from banking to transportation with 72 specific initiatives, including several that target healthcare, which is already in turmoil amid the COVID-19 pandemic, which has exacerbated physician shortages and nurses, strained supply chains and pushed veteran administrators into retirement. .
“For decades, corporate consolidation has accelerated,” said a statement issued with the order. “In more than 75% of US industries, fewer large companies now control more activities than twenty years ago. This is true in healthcare, financial services, agriculture and more. This lack of competition drives up prices for consumers.
The statement cites data claiming the mark-ups have tripled, raising the costs of basic necessities such as prescription drugs, hearing aids and internet service, which have become essential during the pandemic as telehealth has become the only one. way to see a doctor.
Key elements of Biden’s decree include:
- Facilitate job change, including between states, by reducing professional licensing requirements and limiting non-compete agreements.
- Reduce prescription drug prices by authorizing state and tribal run programs that import drugs from Canada.
- Sale of over-the-counter hearing aids.
- Promote more procurement opportunities for small businesses with federal agencies.
- Empower antitrust agencies, including the Federal Trade Commission, to address consolidation issues in certain industries, including healthcare, where mergers have left some rural areas without hospitals.
The order creates a White House Competition Council to monitor the progress of agency initiatives and response.
The consolidation of healthcare over the past decade – hospital mergers into larger systems, acquisition of practices and vertical integration of healthcare plans and pharmacy benefit managers (PBMs) – has caught the attention of consumers and competition advocates who say the trend is against cutting costs. , especially when looking at some individual markets.
The order directs the Department of Justice and the FTC to review the hospital merger guidelines to ensure patients are not harmed.
Recent trends also work against limiting the price of prescription drugs, as powerful PBMs can dictate which drugs appear on formularies, demand discounts, or charge fees. Just this week, a study by authors at USC’s Schaeffer Center found that Medicare spent $ 2.6 billion in 2018 on commonly prescribed generic drugs compared to the prices Costco charges.
Biden’s order directs HHS to do the following:
- Support hospital pricing transparency rules and complete the implementation of bipartite federal legislation to tackle surprise hospital billing. This is significant, as many have questioned the transparency rules imposed at the very end of the Trump administration.
- Restore an Obama-era rule that insurers selling plans in the federal market, created by the Affordable Care Act, must have at least one standard design to serve as a benchmark for consumers to compare with other companies . This concept was abandoned under the Trump administration.
- Directs the FDA, which is part of the HHS, to work with states and tribes on safe import practices under the Medicare Modernization Act 2003.
- Increases support for generics and biosimilars and grants 45 days for a comprehensive plan to tackle high prescription prices.
- Allows the FTC to ban “pay for delays” and similar practices that keep low-cost drugs or biosimilar options from the market.