President Donald Trump recently signed an Executive Order (EO) aimed at lowering the cost of prescription drugs, titled, “Lowering Drug Prices by Once Again Putting Americans First.”
On April 15, 2025, through this EO, the Trump Administration directed the US Department of Health and Human Services (HHS) to take policy and regulatory steps to lower the cost of prescription drugs and to work with Congress in certain areas to legislate policy changes.
Details of the EO
The EO directed the HHS to take action to lower the cost of drugs specifically related to:
- Increasing savings achieved through the Medicare Drug Price Negotiation Program (MDNP)
- Generic and biosimilar drug competition
- Site-neutral policies for Medicare payments for prescription drugs
- State-based importation of lower cost drugs
- Reforms to and the roles of drug middlemen, or pharmacy benefit managers
- Making insulin and injectable epinephrine available at or below the discounted prices paid by health centers under the 340B Prescription Drug Program to certain low-income individuals, and
- Improving drug price transparency for consumers.
The EO states that the US should optimize federal healthcare programs, intellectual property protections, and safety regulations to provide access to lower the cost of prescription drugs for American patients and taxpayers.
What to expect
The EO requires that within 60 days, the HHS Secretary propose and seek comment on guidance for the MDNP to improve the transparency of the program, prioritize selection of high-cost drugs under Medicare, and minimize negative impact on US pharmaceutical innovation.
Additionally, within 180 days, the Assistant to the President for Domestic Policy, the Director of the Office of Management and Budget, and the Assistant to the President for Economic Policy will provide recommendations to President Trump regarding the best options to stabilize and reduce Medicare Part D premiums.
The EO directs the HHS Secretary to work with Congress to modify the MDNP to align the treatment of small molecule prescription drugs with biological products to end the current law discrepancy that undermines relative investment in small molecule drugs, known as the “pill penalty.”
Current law “pill penalty” allows a small molecule drug to be eligible for negotiation 7 years after FDA approval (price controls being in effect at 9 years), versus negotiation eligibility 11 years after FDA approval (price controls being in effect at 13 years) for large molecule products.
While the EO doesn’t specifically direct Congress to pass specific pieces of legislation, Congress could make additional policy changes to the Inflation Reduction Act MDNP if there is consensus for additional improvements.
Of note, in order for many of these policies to take effect, Congress will need to make legislative changes, or the federal agencies charged with rolling out these initiatives will have to go through formal rulemaking processes.
For more information
A fact sheet with additional information can be found here.
Additional insight will be provided in a future session of Senator Richard Burr's 2025 "Office Hours" Series. A link to register for this virtual biweekly series can be found here.
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