Legal Challenges Likely Following Drug Pricing Executive Order: John Barkett, MBA

John Barkett, MBA, managing director in Berkeley Research Group's Healthcare Transactions and Strategy practice, reiterated that the executive order that President Donald Trump signed on May 12 to lower drug costs could be met with legal challenges from the drug industry among others.

This transcript has been lightly edited for clarity; captions are auto-generated.

Transcript

What can we expect when it comes to legal challenges to this executive order?

This feels like the kind of thing that's going to be challenged. They're attempting to bully the industry into voluntarily lowering prices. If they don't do that, they're saying they're going to consider these policies, some of which have been pursued already, like they tried the Innovation Center model once before. It got thrown out in court. They have tried to work within the existing statutes to enable drug reimportation. So far, no one's been able to pick that up and make it work. How much more they can really push is a question.

They're threatening removing drugs from the market because they say they're being improperly marketed or unsafe. Presumably, there are patients who take those drugs who would be harmed if that were the case. So it's not clear what leverage the administration has, but that wasn't your question. Your question was about legality. I think if you were the drug manufacturers, in this case, you'd be concerned.

That CMMI [Center for Medicare and Medicaid Innovation] model, it's an innovation center model, if it's for physician-administered drugs, then it's not just the manufacturers who have a cause of action here. It's physicians, it's cancer docs, oncologists, hospitals that infuse these drugs, that administer these drugs on behalf of patients who need them. That could lead to access issues and then patients get involved. Then you have on the other side of it, industries have a long history of taking government to court when they don't like the policy. It's a near certainty that if the Trump administration does something that pushes the bounds of policy here, that stakeholders will take them to court over it.