WASHINGTON, D.C. — In a new push to tackle the rising cost of prescription drugs, President Donald Trump signed an executive action Tuesday aimed at delivering lower prices for American consumers, especially seniors on Medicare.
The move builds on existing provisions from the Inflation Reduction Act of 2022, with a promise to expand savings and accelerate reform in the U.S. drug pricing system.
Key Focus: Medicare Drug Price Negotiation Program
A central feature of the executive action is an expansion of Medicare’s drug price negotiation program, which allows the federal government to directly negotiate prices with pharmaceutical companies. This program began under the Biden administration and is set to roll out gradually through 2029.
- In 2024, Medicare began negotiating the prices of 10 high-cost drugs.
- In 2025, 15 more drugs, including Ozempic, a popular diabetes medication, will enter negotiations.
- Trump’s administration now aims to expand the scope further and deliver deeper savings by 2027, though the effects will take time to be seen.
“We are confident we will eclipse the savings the Biden administration achieved in the first year,” a senior White House official said ahead of the announcement.
Timeline for Savings
While the action has been signed, price reductions won’t be immediate:
- Biden-era negotiated prices will take effect in 2026.
- Trump’s new round of negotiations won’t reflect in consumer prices until 2027.
Potential Tariffs Could Complicate Prices
The White House also confirmed a separate federal investigation into the national security impact of importing pharmaceuticals and drug ingredients, which could lead to tariffs on imported drugs. If implemented, these tariffs may increase costs on some medications, potentially offsetting some of the savings from Medicare negotiations.
Insulin and Epinephrine Access Revived
Trump’s executive action revives a first-term initiative to make insulin and injectable epinephrine more affordable for low-income Americans, including those without health insurance:
- Insulin could be made available at 3 cents per vial, plus a small administrative fee.
- Injectable epinephrine (like EpiPens) may be available for $15 per auto-injector under the new program.
“The president is leveraging current programs to deliver meaningful cost savings here,” said the White House official.
Generic Drug Importation and FDA Reform
The action also directs the FDA to:
- Streamline approval for low-cost generics and biosimilars.
- Facilitate state drug importation programs, like Florida’s plan to import drugs from Canada (which has received FDA approval but has not yet launched).
Addressing Imbalance Between Pills and Biologics
The administration’s action also targets a regulatory imbalance that gives biologic drugs an 11-year protection from Medicare negotiations, compared to 7 years for small-molecule drugs (like most pills).
This policy, the administration argues, incentivizes drugmakers to focus on complex and costly biologics over more affordable pills. The executive order calls on Health and Human Services Secretary Robert F. Kennedy Jr. to work with Congress to close this gap without increasing Medicare spending.
Payment Reform Across Care Settings
Another component of the order seeks to align drug payment policies across different care settings. Currently, the price Medicare pays hospitals for drugs can differ depending on where a patient is treated. The new directive would begin the process of standardizing payment, potentially reducing unnecessary cost disparities.