Advocacy & Practice Updates — Advocacy & Practice
Trump Seeks Lower Prescription Drug Costs in Broad Executive Order
In an executive order (EO) issued late Tuesday, President Trump instructed the Department of Health and Human Services (HHS) and the Office of Management and Budget (OMB) to undertake a broad effort to reduce the cost of drugs in the Medicare and Medicaid programs. While the ultimate details and impact of the actions included are not known, it is important to note that the EO does not make any immediate change to the current buy-and-bill system for Medicare Part B drugs.
Instead of ordering specific policy changes, the EO directs agencies to issue rulemaking or plans over the next few months to a year targeting certain areas, such as:
• Continue developing the framework for Medicare drug price negotiation authorized under the Inflation Reduction Act (IRA);
• Develop a payment model, within one year, to reduce the cost of drugs not subject to Medicare price negotiation;
• Survey the hospital acquisition costs of drugs and develop a plan to align Medicare reimbursement closer to those costs;
• Evaluate site of service price differentials, and if appropriate, develop regulations to shift Part B drug administration away from higher cost outpatient departments to lower cost physician offices;
• Develop recommendations to increase value, transparency and competition in the drug chain, including targeting pharmacy benefit managers (PBMs); and,
• Provide regulatory and legislative recommendations to accelerate the approval of biosimilars and generics.
The EO also informs Congress of the administration’s support for legislative changes to the IRA that would more closely align how Medicare negotiates the price of small and large molecule drugs.
The administration also released a fact sheet with this EO. ASRS will continue to follow this issue as more details are released and keep members updated.
(Published 4.16.25)