President Donald Trump signed an executive order aimed at lowering drug prices and expanding access to affordable medications, according to an April 15 White House Fact Sheet.
Through the efforts laid out in the order, the Trump administration said it aims to surpass the 22% in savings that the Biden administration achieved during the first year of the Medicare Drug Pricing Negotiation Program.
Here are five things to know:
- The order directs HHS secretary Robert F. Kennedy Jr. to work with Congress to eliminate what the pharmaceutical industry has dubbed the “pill penalty” – a disparity in how quickly different types of drugs become subject to Medicare price negotiations under the Inflation Reduction Act. Currently, small molecule drugs become eligible for negotiated price cuts after they have been on the market for nine years, while biologics — which are more complex drugs and are often infused — are not eligible for price cuts until they have been on the market for 13 years.
Administration officials say this timeline difference discourages investment in small molecule treatments that could benefit broader patient populations. While the president’s executive order directs Congress to address the imbalance, it does not propose a specific exemption timeline for either drug type. - In addition, the FDA has been directed to streamline approvals for generic drugs and biosimilars, aiming to increase competition and improve access to lower-cost drugs.
- Another key provision in the order revives an executive order from President Trump’s first term, directing federal qualified health centers to offer insulin and injectable epinephrine at steep discounts to uninsured and low-income patients. The order requires clinics to provide the medications at or below the 340B purchase price, plus a small administrative fee, as a condition for receiving certain federal funding.
The policy aims to dramatically reduce out-of-pocket costs for essential medications, potentially as low as 3 cents per dose for insulin and $15 for epinephrine. The Biden administration previously froze the rule after pushback from clinics, which cited excessive administrative burdens. - The order also seeks to align Medicare reimbursement rates for specific drugs with the prices hospitals pay to acquire them, which can be up to 35% lower than what the government currently pays.
The executive order directs HHS to explore standardizing Medicare payments for the administration of drugs like cancer treatments regardless if they are administered in a hospital or doctor’s office. The narrowed version of the so-called “site-neutral” reform could reduce prices by as much as 60%, according to a White House statement.
- The executive order directs the FDA to improve the process allowing states to import lower-cost prescription drugs from Canada. The move builds on President Trump’s first term efforts. Since then, only one program in Florida has been approved for imports. As of late last year, the state had not yet started importing drugs from Canada, according to the Times. However, if President Trump follows through with pharmaceutical tariffs, the cost savings potential from Canadian imports could be significantly reduced.
