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Trump’s New Executive Order Aims to Lower Drug Prices

April 17, 2025
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April 17, 2025 09:00 AM PST

(PenniesToSave.com) – In a move that could reshape how Americans pay for medicine, President Donald Trump has signed a wide-reaching executive order aimed at lowering prescription drug prices. With out-of-pocket costs rising for seniors and working families, this order attempts to restructure how Medicare negotiates with pharmaceutical companies and how prescription drugs make it to market. If implemented effectively, the changes could bring meaningful relief to households burdened by the high cost of essential medications.

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What changes is Trump making to Medicare drug pricing?

The most high-profile change in the executive order involves expanding and modifying Medicare’s ability to negotiate the price of prescription drugs. Historically, Medicare was prohibited from negotiating directly with pharmaceutical companies—a restriction that many critics argue gave too much pricing power to Big Pharma. In 2022, reforms began allowing Medicare to negotiate on a limited basis. Now, Trump’s executive order seeks to expand that authority and revise key timelines.

One of the major shifts involves small molecule drugs, which are chemically manufactured pills like statins or blood pressure medications. Under the current framework, Medicare could begin price negotiations 9 years after approval. The executive order proposes extending this window to 13 years, aligning it with biologic drugs (typically injected or infused treatments). Supporters of the change argue it will encourage innovation by giving pharmaceutical companies a longer return on investment. Critics warn it could delay price relief for widely used medications.

The order also calls for the Department of Health and Human Services (HHS) to prioritize the highest-spend drugs for negotiation, improve pricing transparency, and report on the program’s cost savings in real time. In its first year, the negotiation program reduced prices by an estimated 22%. The administration is aiming for further reductions without compromising drug availability.

How will Americans get cheaper medications?

The executive order revives and expands on earlier Trump-era initiatives to provide affordable drugs directly to Americans who are uninsured or underinsured. It reinstates a discount program through federally qualified health centers that offers insulin and injectable epinephrine (EpiPens) at drastically reduced prices. For example, insulin could be obtained for $0.03 per unit with only a minor administrative fee—potentially saving patients hundreds per month.

Beyond direct subsidies, the order emphasizes regulatory reform to speed up generic drug approvals. The Food and Drug Administration (FDA) is instructed to fast-track applications for generics and biosimilars, many of which face bureaucratic delays due to patent disputes and lack of competition. Generic drugs often cost 80–90% less than their brand-name equivalents. Expediting these approvals could save Americans billions over time.

A key affordability pillar of the order is importation. States will now be encouraged and supported in creating programs to import lower-cost prescription drugs from trusted countries like Canada. While the practice has been controversial due to concerns over safety and regulatory control, proponents argue that it introduces competitive pressure on U.S. prices and provides a vital stopgap for patients with no other options.

What is being done to increase transparency and competition?

To address the structural issues behind rising drug prices, the executive order targets the hidden mechanics of pharmaceutical pricing—especially the role of pharmacy benefit managers (PBMs). These middlemen negotiate deals between insurers, drug manufacturers, and pharmacies, often taking rebates or incentives that are not passed down to consumers. The order directs HHS and the Federal Trade Commission (FTC) to investigate and publish how PBMs are compensated and whether their practices reduce or inflate costs at the consumer level.

It also establishes an interagency task force between HHS, the Department of Commerce, the Department of Justice, and the FTC. This coalition will study market concentration, patent abuse, and anti-competitive practices. For instance, “pay-for-delay” deals—where brand-name drug makers pay competitors to postpone the release of generics—have drawn legal scrutiny in recent years. The executive order mandates public listening sessions and requires an annual report to Congress with policy recommendations on how to improve pricing transparency and increase competition.

Additionally, the administration is directing agencies to explore consumer education programs so that patients understand the true cost of their medications and the impact of supply chain inefficiencies. By bringing pricing dynamics into public view, Trump officials argue the market will become more accountable and responsive to average Americans.

What does this executive order mean overall?

This executive order is one of the most ambitious drug pricing reforms ever attempted without new legislation. By using executive authority to reshape regulations, the Trump administration hopes to deliver tangible savings to millions of Americans struggling with prescription costs.

If implemented successfully, seniors on Medicare may soon see lower out-of-pocket expenses, uninsured patients could get access to lifesaving drugs at a fraction of today’s prices, and market competition might finally break the monopolistic grip some companies hold over drug categories. However, political opposition, legal challenges from the pharmaceutical industry, and bureaucratic resistance could all slow the impact.

For everyday Americans, especially retirees and families managing chronic illnesses, this could be a major financial reprieve. But as with all executive orders, the details will matter—and the benefits will depend on how aggressively and efficiently the policy is rolled out.

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