President Trump takes aim at drug prices with Medicare negotiation expansion, but critics question if the plan will deliver promised savings.
Key Takeaways
- President Trump signed an executive order aimed at lowering prescription drug prices, including measures to allow state importation of drugs from Canada.
- The order seeks to reform Medicare’s drug price negotiation program established under the Inflation Reduction Act of 2022.
- Changes to the negotiation program could delay price cuts for some drugs and potentially increase Medicare spending contrary to stated goals.
- The administration plans to revive programs providing low-cost insulin and epinephrine to low-income individuals.
- Health Secretary Robert F. Kennedy Jr. is directed to work with Congress on addressing imbalances between small molecule drugs and biologics in the negotiation program.
Trump’s Latest Approach to Medicare Drug Pricing
In a move that signals a shift in healthcare policy, President Trump recently signed an executive order focused on prescription drug pricing reform. The action aims to leverage Medicare’s negotiating power to secure better prices for beneficiaries. While the administration presents this as a path to delivering lower costs to seniors, the new policies appear less ambitious than those proposed during Trump’s first term. The order includes provisions to allow states to import medications from Canada, potentially creating new avenues for Americans to access more affordable pharmaceuticals.
Medicare began negotiating prices for 10 drugs under the Inflation Reduction Act in 2022, with 15 more medications scheduled for negotiation this year. Trump’s administration claims its approach will achieve greater savings than the previous administration’s efforts. However, price reductions from Biden-era negotiations will take effect in 2026, while Trump’s proposed changes would not impact consumers until 2027, creating a potential delay in relief for Medicare beneficiaries.
Potential Complications and Concerns
Despite promises of lower costs, one directive in the executive order could potentially increase drug prices by altering key provisions of the 2022 law governing Medicare’s drug spending. The restructuring could lead to billions of dollars in increased Medicare drug spending compared to the current legislation. The executive order suggests that changes to the Medicare price negotiation program should include reforms to prevent increased costs to Medicare and its beneficiaries, but the implementation details remain unclear.
President Trump signed an Executive Order and announced actions to lower prescription drug prices:
-Deliver lower drug prices for Medicare
-Provide massive discounts to low-income patients for life-saving medications
-Facilitate importation programs to save states millions in… pic.twitter.com/qRf51KveWo— Libs of TikTok (@libsoftiktok) April 16, 2025
The action specifically addresses what the administration identifies as an imbalance in Medicare’s drug price negotiation program between small molecule drugs and biologics. Health and Human Services Secretary Robert F. Kennedy Jr. has been instructed to work with Congress to address this disparity. Additionally, the executive order seeks to align Medicare drug prices with hospital acquisition costs and standardize payment across different care settings.
Additional Healthcare Initiatives
Beyond Medicare negotiations, the administration plans several additional healthcare measures. The FDA is directed to facilitate state importation programs and streamline approval processes for generics and biosimilars, potentially increasing market competition. The executive order also calls for reviving a program to provide low-cost insulin and epinephrine to low-income individuals, addressing critical needs for patients with diabetes and severe allergies.
Healthcare experts note that potential tariffs on imported pharmaceuticals, which align with the administration’s broader trade policies, could increase consumer costs, potentially offsetting savings from other provisions. The original negotiation program was created by the Inflation Reduction Act passed in 2022 during a Democratic-controlled Congress and supported by former President Biden, making this executive action a significant modification to a signature Biden-era healthcare policy.
Sources:
Trump Seeks to Lower Drug Prices Through Medicare and Some Imports
Trump signs healthcare executive order that includes a win for pharma companies
Trump signs executive action to lower drug prices
