Trump takes another stab at lowering drug prices
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Annelise Capossela/Axios
President Trump's wide-ranging executive order aimed at lowering pharmaceutical costs revives policies from his first term and alters programs started during the Biden administration — including making a drug industry-backed change to Medicare drug price negotiations.
The big picture: The order that Trump signed on Tuesday may be sweeping, but consists largely of ideas that have already been floated or even tried before.
- Polling repeatedly shows that voters want lower drug costs. But actually making that happen is easier said than done.
The fine print: The executive order is light on details of how some of the policies will be implemented. White House officials told reporters on a call Tuesday afternoon that specifics for some of the initiatives, including how the Medicare prescription drug program will be changed, will have to wait.
- The Trump administration wants to learn from the experiences of the Biden team on the negotiation process, an official said.
- Perhaps the most noteworthy change asks HHS to work with Congress to fix what the administration calls a "distortion" in the negotiations for small-molecule drugs. It's sometimes referred to as the "pill penalty."
- The law now exempts synthetic drugs from negotiation for nine years after they hit the market while giving more complex biologics 13 years. The order calls for aligning the two but doesn't say for how long.
- Drugmakers have long backed such a change, saying it deters investment in small-molecule drugs.
- "We applaud the President's efforts to lower medicine costs for patients," Alex Schriver, senior vice president of public affairs at PhRMA, said in a statement. "The President is right to focus on ensuring that more of the 50% of medicine spending currently going to insurers, PBMs and hospitals is used to lower costs for patients."
The order also directs Health and Human Services to reinstitute a program from Trump's first term to provide discounted insulin through federally qualified health centers.
- Additionally, it calls on the Centers for Medicare and Medicaid Services to launch a pilot project to get better value for high-cost therapeutics and directs the Food and Drug Administration to streamline approval of generic and biosimilar drugs.
- The order also directs Food and Drug Administration to facilitate more state plans to import drugs — something Trump pushed in his first term but that relatively few states took the administration up on.
Trump also instructed HHS to survey hospitals on their drug acquisition costs, and consider policies to align Medicare payment with those acquisition costs.
- Hospitals often get discounted drugs through federal discount programs but get paid in full by Medicare for administering them, a White House official noted to reporters.
Reality check: Many of Trump's first-term drug pricing initiatives were not actually implemented.
- Some critics were quick to brand Tuesday's order as wrongheaded.
- "Further delaying Medicare drug price negotiation would lead to higher prices for patients and taxpayers, not lower ones," said Public Citizen drug policy advocate Steve Knievel.
Worth noting: Trump earlier this year rescinded a similar executive order from former President Biden that also aimed to lower prescription drug costs.
Zoom out: Trump is expected to impose tariffs on pharmaceuticals produced overseas in the coming weeks. Experts say such a policy could increase drug costs and exacerbate shortages.
- White House officials said the administration is working to protect the drug supply chain in times of geopolitical strife and natural disasters, while also lowering drug prices.
