Overview

• 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.