How the pharma industry will be treated if the Trump administration implements a ‘no new entrants’ rule
Pharmacy delivery and pharmacy services, which were previously exempted from federal regulations, are likely to be subject to the same requirements as wholesale and retail pharmacy delivery companies.
That’s because the Trump Administration has imposed a “no new entries” rule that would impose requirements on all new entrants to the drug industry.
The rule would require new entrants — including those in the pharmacy industry — to pay a 1% federal surcharge on any product sold through their companies, with exceptions for prescription drugs and devices.
The surcharge would apply to new entrants for the first 30 days of operations, or 180 days, whichever comes first.
The new entrants would be subject only to a 30% federal tax on their net profits, with a 10% surcharge for any additional sales, and a 5% surtax for any new business ventures.
The tax applies to all product sold at the new entrants retail stores, but not to all products sold through the retail pharmacy.
This could create a problem for the pharmacy-delivery industry, as a large number of new entrants may not be able to pay the surcharge.
The Trump Administration also is imposing a surcharge of $1.75 per package for all new drugs, and would require any new entrants who want to enter the industry to file a “Notice of Proposed Rulemaking,” which is a formal request for approval.
This request would also include a request to get a waiver from a federal judge that allows the administration to issue a “notice of rulemaking” to regulate the industry.
This is important, because if the administration fails to issue the notice of rulemakings, then the pharmacy sector could face a new wave of regulation and a much tougher challenge in securing approval.
For example, if the drug marketplaces were not fully open to new competition, the surcharges would likely apply to any new company that enters the market.
For new entrants, the rule would also apply to the supply chain for new products, as well as to the wholesale industry, which is expected to face new restrictions on supply, as the Trump transition team prepares to make its final determination on what the final regulations should be.
A “nonew entrants” rule could affect both the pharmaceutical industry and pharmacy delivery as a whole.
For pharmacy delivery services, the rules would also affect some existing providers of pharmacy services.
The federal government could also impose a surtax on new entrants that have been operating without a permit.
The administration is also expected to impose a tax on new suppliers that are operating in states that have opted out of the Affordable Care Act’s Medicaid expansion.
As the Trump team prepares its final rules, the pharmaceutical and pharmacy sectors are already bracing for a range of regulation, including new taxes on new manufacturers and new requirements on new entry into the industry, including a surcharges and taxes on the number of prescriptions and prescriptions filling pharmacies, as we reported earlier this week.