US leaders at the federal level have in the past touted the benefits of a free, open economy, with robust, fair competition supposedly working for the good of both the consumer and the businesses. Current President Joe Biden is no exception.
“The American promise of a broad and sustained prosperity depends on an open and competitive economy. For workers, a competitive marketplace creates more high-quality jobs and the economic freedom to switch jobs or negotiate a higher wage,” Biden said in the recently issued Executive Order on Promoting Competition in the American Economy.
“For small businesses and farmers, it creates more choices among suppliers and major buyers, leading to more take-home income, which they can reinvest in their enterprises. For entrepreneurs, it provides space to experiment, innovate, and pursue the new ideas that have for centuries powered the American economy and improved our quality of life,” he continued. “And for consumers, it means more choices, better service, and lower prices.”
However, according to the executive order, consolidation in several industries has weakened this healthy competition, putting the entire economy and American way of life at risk.
“Consolidation has increased the power of corporate employers, making it harder for workers to bargain for higher wages and better work conditions,” he wrote in the order. “Powerful companies require workers to sign non-compete agreements that restrict their ability to change jobs. And, while many occupational licenses are critical to increasing wages for workers and especially workers of color, some overly restrictive occupational licensing requirements can impede workers’ ability to find jobs and to move between States.”
By issuing the executive order, Biden reportedly hopes to bring back fairness and equity in all sectors, including agriculture, information technology, telecommunication, and other areas. Among the industries Biden singled out is the pharmaceutical business.
“Americans are paying too much for prescription drugs and healthcare services — far more than the prices paid in other countries,” Biden stated. “Hospital consolidation has left many areas, particularly rural communities, with inadequate or more expensive healthcare options. And too often, patent and other laws have been misused to inhibit or delay — for years and even decades — competition from generic drugs and biosimilars, denying Americans access to lower-cost drugs.”
In a move designed to encourage more fair competition to create more fair and robust competition, Biden’s put forth changes in policy, government enforcement of fair business practices, inter-agency cooperation, the establishment of the White House Competition Council, and responsibilities of various agencies in supporting the actions.
In the various provisions Biden spelled out in the order, he strongly encouraged reforms aimed at lowering pharmaceutical product prices.
“It is…the policy of my Administration to support aggressive legislative reforms that would lower prescription drug prices, including by allowing Medicare to negotiate drug prices, by imposing inflation caps, and through other related reforms,” he stated. “It is further the policy of my Administration to support the enactment of a public health insurance option.”
In the order, Biden also warned that his administration would, going forward, be on the lookout for “unfair anticompetitive conduct or agreements in the prescription drug industries, such as agreements to delay the market entry of generic drugs or biosimilars.” The text of the order also stated the Biden administration will continue “to clarify and improve the approval framework for generic drugs and biosimilars to make generic drug and biosimilar approval more transparent, efficient, and predictable, including improving and clarifying the standards for interchangeability of biological products.”
In the US, an executive order is a federal directive issued by the president to manage operations of the federal government. While an executive order is not subject to approval by Congress or other government entities outside the White House, the directive may be overturned after a judicial review of found to lack support by federal statute or the Constitution.
View the full text of the Executive Order on Promoting Competition in the American Economy here.
