Top Dem: Obama to Sign Executive Order Controlling Prescription Drug Prices

Martin Shkreli, CEO of Turing Pharmaceutical, is brought out of 26 Federal Plaza by law enforcement officials after being arrested for securities fraud last month (Photo: Andrew Burton for Getty Images)

Martin Shkreli, CEO of Turing Pharmaceutical, is brought out of 26 Federal Plaza by law enforcement officials after being arrested for securities fraud last month (Photo: Andrew Burton for Getty Images)

President Barack Obama will sign an executive order that will limit what pharmaceutical companies can charge, Congressman Charles Rangel, the dean of New York City’s congressional delegation, announced Tuesday night.

At a town hall in East Harlem, Mr. Rangel, a Democrat, expressed sympathy with a constituent who complained of the high cost of her medication. He blamed manufacturers, who he argued act as a cartel and artificially inflate prices, with the knowledge Medicare will pay whatever they ask.

“These people come together, they arbitrarily, unilaterally, set a price, and the price is based not on people’s ability to pay, but just how much money can they make off of the job? Knowing that in most cases, it’s the federal government’s paying for it,” he said “So they’re really stealing out of everybody’s pocket.”

Medicare Part D, created under President George W. Bush in 2003, underwrites prescription drugs for those participating in the federal program, but prohibits the government from negotiating with pharmaceutical companies for lower prices. Mr. Obama vowed on the 2008 campaign trail to reform the law to allow for bargaining, but never acted on it after getting the Affordable Care Act passed in 2010.

Mr. Rangel said that the executive order was a reaction to what he claimed was the Republican Congress’s refusal to cooperate with the president. He said Mr. Obama would sign it almost immediately upon returning to Washington from Detroit, where he spoke to auto workers today and also touched on the water contamination crisis in Flint, Michigan.

“This president is going to take, use his executive powers, to deal with this thing as soon as he gets back. I’m sorry that he had trusted the Republicans for these seven years,” Mr. Rangel said. “And I’m sure glad that his back is against the wall, and he’s going to be swinging from the floor.”

Mr. Rangel argued that drug manufacturers were all of a piece with Martin Shkreli, who rose to notoriety last year after he purchased the rights to the medication Daraprim—used to treat an AIDS-related condition—and increased the price from $13.50 a pill to $750 a pill. The Turing Pharmaceutical CEO was arrested on unrelated securities fraud charges in December.

“They’re all doing it, just not to the extent of the crazy kid who’s running the company,” he said.

Mr. Shkreli has been subpoenaed to testify before a House of Representatives committee on drug prices scheduled for January 26.

The White House did not immediately respond to requests for comment, and it is unclear whether the executive order would grant the federal government the ability to negotiate prices, or impose caps on costs. The move would be the president’s latest attempt to unilaterally address a controversial issue through fiat. He sought to single-handedly create a path to citizenship for five million undocumented immigrants in 2014, and ordered universal licensing and background checks for firearms sales without Congress earlier this month.

Both orders have faced legal challenges.

Top Dem: Obama to Sign Executive Order Controlling Prescription Drug Prices