It's not toothless. There is an existing law that allows the government to issue their own licenses for drugs still under patent developed using at least some amount of tax payer money under certain circumstances. It's pretty broadly worded in the law when this can be done, so previously regulations were made to define the circumstances more precisely. The administration is issuing a new regulation that says one of those circumstances will now include if the drug is high priced limiting its access. Because new regulations issued by the executive branch have a mandatory public comment period after they are proposed before they take effect, its not active quite yet but will be soon (that's why every headline about this is using the dumb vague word of threaten). The drug companies are already promising to sue to try and overturn the new regulation. So yeah it's got teeth.