Trump Signs Executive Order to Overhaul Medicare Drug Pricing Program

The order directs HHS to collaborate with Congress on reforms expected to lower drug costs by aligning payment rates, streamlining approvals, and revisiting prior initiatives.

President Trump signed an executive order instructing the Department of Health and Human Services to work with Congress on revising Medicare's drug price negotiation process.
The reforms aim to generate greater savings than those achieved under the Biden administration, with a focus on aligning Medicare payments with hospital acquisition rates, which are up to 35% lower.
The order revives a prior initiative to cap insulin costs for low-income individuals, including the uninsured, and seeks to standardize patient payment rates across service locations.
The FDA has been directed to streamline approvals for state drug importation programs and encourage competition through faster approval of generic and biosimilar medications.
The administration is considering pharmaceutical tariffs, which could offset some cost reductions, as part of broader efforts to recalibrate the balance between affordability and industry innovation.