Gov. DeSantis announces drug price transparency executive order

CAPE CORAL, Fla. (WFLA) — Gov. Ron DeSantis spoke at Cape Coral High School alongside Secretary of the Agency for Healthcare Administration Simone Marstiller. Signage at the event read “Lower Drug Prices.”

Before starting the event, DeSantis expressed condolences over the death of former Japanese Prime Minister Shinzo Abe, who was shot to death Friday morning. He also announced a summit to meet with Japanese officials in Florida that was planned for later in 2022.

The governor also praised the level of budget surplus the state had reached, approaching $22 billion and promised further “tax relief” for Floridians, saying problems in Washington had made inflation worse and that it “did not have to happen and in many ways was self-inflicted.”

As he has in the past, DeSantis said President Joe Biden’s energy policies had hurt American energy production and the economy, and referenced still problematic supply chain issues. He said a recession could be coming and that “storms were on the horizon,” after two consecutive quarters of negative economic reports.

Focusing on the topic of the event, DeSantis said addressing pharmaceutical prices was somewhere the state “could make a difference.”

“One of the areas we’ve been focused on, really since I became governor, in terms of high prices that are biting Floridians is prescription drug costs,” DeSantis said. “What can we do at a state level, even though most of this is driven by Washington. What could we do to potentially make an impact on prescription drug prices for Florida?”

He said the state had “really did a deep dive” to learn how the pharmaceutical and healthcare pricing functioned, focusing on transparency and working to “bring some sanity” to the healthcare process.

DeSantis said the state had used a federal provision from 2003 to petition the federal government to allow importation of pharmaceuticals from Canada. He said no one else had ever done this before.

“These are the same drugs that they sell in the United States, they’re just a lot cheaper because they have different policies. In the U.S., we pay basically for the rest of the world to have cheaper drugs,” DeSantis said. “That’s because the pharmaceutical industry is very powerful, there’s a lot of different reasons for that.”

DeSantis said he’d traveled to Washington to meet with President Donald Trump to seek approval to bring drugs in from out of the country and save Floridians “hundreds of millions of dollars.” Following the meeting, DeSantis and the Florida Legislature passed laws to allow this.

Then, when Biden took office, DeSantis said the state government didn’t know how the process would continue, but noted that Biden had signed an executive order to allow states get access to drugs in Canada, but said the Florida request had stalled.

The governor said the state had submitted a Freedom of Information Act request to ask about the delay, but suggested that “maybe they just don’t want to give Florida a win.” He said the state may end up in litigation over the issue, depending on the outcome.

DeSantis said he’d asked Marstiller to “do a deep dive” on pharmaceutical benefit managers to see how costs were increased for drugs at the pharmacy counter, “particularly for senior citizens.” He said it was an “incredibly opaque process” and said it had developed into a cottage industry.

Friday, the governor said he would be signing an executive order aimed at holding pharmacy benefit managers accountable and providing more transparency for drug costs to residents.

“We are directing our state agencies to look at all their contracts with PBMs and ensure that costs to the state of Florida are justified,” DeSantis said. “AHCA and the Department of Management Services will audit the PBMs that have performed services for them in the past to determine if cost-saving measures are in place. If not, we’re going to insist they will.”

He also said the state would enact new regulations to prevent spread pricing and clawbacks. DeSantis described spread pricing as a “deceptive practice” when a PBM collects payment from individuals, then collect leftover funds after reimbursing pharmacies. He said the practice drove up costs. Talking about clawbacks, DeSantis said it was when patients overpay for a prescription, and PBMs keep the leftovers as “a bonus.”

Agencies will also be directed to examine rebate practices and reviewing of payments and relationships between pharmacies, manufacturers, and insurers, to make pricing more transparent.

Marstiller spoke about the drug pricing issue, following DeSantis’ comments.

“I know everybody in this room knows that healthcare is way too expensive,” Marstiller said, thanking DeSantis for his leadership on the issue. “The governor mentioned our FOIA request to the FDA. I can tell you, they’ve already let us know that they very well may not be able to comply with that 20 day deadline ‘because they’re so busy.’ And that’s essentially what the letter says. So we’ll see.”

She said that was nothing new for the FDA, saying that for most of the past two years the importation proposal had stalled in a “black box.” Marstiller said AHCA had worked with the state vendor to prepare, but the U.S. Food and Drug Administration had “continued to employ stall tactics that prevent progress.”

“Every single time, it has been a word salad, a bureaucratic roadblock, delays, and no timeline for approval of our proposal,” Marstiller said. “Even when we’ve asked for particular, we’ve been met with resistance and been promised follow-ups that we’ve never gotten.”

Marstiller specifically blamed the FDA’s “boss, President Biden’s” directive to get it done, saying Florida had seen how fast the FDA can act when “it wants to” regarding issues like baby formula shortages and other medical needs, but was stalling on Florida’s needs for import.

“The Biden FDA is saying it’s immediately safe and effective to give infants in the United States baby formula from other countries, but it’s apparently not ready, nearly 600 days later, to allow states to import highly effective prescription drugs from Canada, even while it allows individuals to do so for personal use,” Marstiller said.

She confirmed AHCA was prepared to sue to receive the information it needs from the federal government.

DeSantis said the executive order would be published later Friday and thanked the crowd before answering a few questions.

He said the state was prompted to look more closely at the pharmaceutical industry after legal actions in the state of Ohio.

“Last year we saw the state of Ohio did a big settlement with one of the insurers, these are insurers that are involved in Florida too. So we said, where is this? It was a pretty significant amount of money, all right, it’s not budget dust,” DeSantis said. “This was not something Florida had really done before, and it was very opaque what goes on behind the curtain.”

DeSantis said the informational deep dive had occurred because the issue was very complicated and transparency was needed.