Trump's New Push on Drug Pricing

If you've been following the saga of prescription drug prices in the US, you might feel as if you're watching a long-running series with recurring plotlines. On April 15, 2025, President Donald Trump signed an executive order titled "Lowering Drug Prices by Once Again Putting Americans First," aiming to tackle the high cost of medications – a theme that has been central to his second term policy agenda.​

The executive order revives several initiatives from Trump's first term. One notable measure is the reinstatement of a program providing discounted insulin through federally qualified health centers, a policy originally introduced during his first tenure. The order also directs the Department of Health and Human Services (HHS) to survey hospitals on their drug acquisition costs and consider aligning Medicare payments accordingly, potentially reducing costs for patients.

Another significant aspect of the order involves supporting a pharmaceutical industry-backed proposal to delay Medicare price negotiation eligibility for small molecule drugs – primarily pills – by four years. Currently, these drugs are eligible after nine years, but the proposed change would align them with the 13-year waiting period for complex biologics. This adjustment aims to enhance industry innovation, addressing concerns that earlier negotiations could stifle the development of new medications.

The order emphasizes the importance of transparency in “the Medicare Drug Price Negotiation Program.” It calls for the development of reforms to promote a more “competitive, efficient, transparent, and resilient pharmaceutical value chain that delivers lower drug prices for Americans.” This includes improving disclosure of fees that pharmaceutical benefit managers pay to brokers, aiming to reduce hidden costs that can inflate drug prices.

As ever with Trump, he is unable to refrain from small digs at his predecessor Joseph Biden, even in official communications. The order states: “Unsurprisingly, the Biden Administration reversed, walked back, or neglected many of these initiatives, undoing the progress made for American patients. The Biden Administration then signed into law the misnamed Inflation Reduction Act, which included the Medicare Prescription Drug Negotiation Program. While this program has the commendable goal of reducing the drug prices Medicare and its beneficiaries pay, its administratively complex and expensive regime has thus far produced much lower savings than projected.” 

While the executive order outlines ambitious goals, many of its initiatives require further action from Congress and detailed implementation plans from federal agencies. As such, the real impact of these policies on drug prices will depend on the subsequent steps taken by lawmakers and regulators.