New Executive Order Aims To Reduce Prescription Drug Costs Under Trump

Viktoria Ivanova

4 min read

Post on May 13, 2025

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Key Provisions of the Executive Order

The Trump administration's executive order on prescription drug pricing aimed to tackle the issue from multiple angles. Its key provisions focused on increasing transparency, facilitating drug importation, and exploring price negotiation strategies.

• Drug Importation from Canada: The order explored the possibility of allowing the importation of prescription drugs from Canada, where prices are often significantly lower. This was intended to increase competition and drive down prices in the US market. However, significant regulatory hurdles and concerns about drug safety and efficacy hampered the implementation of this provision.

• Price Transparency: The executive order pushed for greater transparency in drug pricing, requiring pharmaceutical companies to disclose their list prices and rebates to the government. This measure aimed to shed light on the complex pricing structures and potentially expose excessive markups. The effectiveness of this measure in actually lowering prices remains a point of debate.

• Negotiating Drug Prices with Medicare: The executive order directed the Centers for Medicare & Medicaid Services (CMS) to explore ways to negotiate drug prices with pharmaceutical companies for medications covered under Medicare Part D. This was a significant departure from previous policy, where direct price negotiation was largely prohibited. However, the scope of this negotiation remained limited, and the pharmaceutical industry strongly opposed this aspect of the order.

• International Price Benchmarking: The order also called for analyzing drug prices in other developed countries to assess whether the US prices were justified. This data was meant to inform future policy decisions and potentially provide leverage in negotiations with pharmaceutical companies.

Impact on Pharmaceutical Companies

The executive order's provisions presented a significant challenge to the pharmaceutical industry. The potential for increased price transparency, drug importation, and direct price negotiation threatened to reduce profit margins, prompting strong opposition from major pharmaceutical companies and their lobbyists. Many companies launched legal challenges and engaged in extensive lobbying efforts to weaken or overturn certain aspects of the order. The industry argued that reduced profits would hinder research and development of new drugs.

Impact on Consumers and Patients

The intended effect of the executive order was to lower out-of-pocket costs for consumers and increase access to affordable medications. While some limited successes were seen in increased transparency, the overall impact on patients varied significantly.

• Potential Benefits: Increased transparency might have empowered consumers to make more informed decisions about their medications. The potential for drug importation from Canada, had it been implemented effectively, could have provided significant savings.

• Potential Drawbacks: Delayed or disrupted drug supplies due to regulatory hurdles associated with drug importation were a concern. The impact on individuals with insurance versus those without insurance varied greatly, with some benefiting more than others.

Long-Term Effects and Sustainability

The long-term effectiveness and sustainability of the Trump administration's executive order on prescription drug costs remain debatable. While the order aimed to address a critical issue, its success was limited by various factors, including strong industry opposition, regulatory complexities, and the inherent difficulty of controlling drug prices in a free market system. The order served as a significant step in the ongoing dialogue on prescription drug pricing, but it highlights the need for broader and more comprehensive reforms to ensure long-term affordability and access to essential medications. The strategy of international price benchmarking, while informative, didn't translate into immediate price reductions in the US. Further policy adjustments, possibly focusing on greater government regulation or incentives for generic drug development, may be needed to achieve sustainable lower prescription drug costs.

Conclusion

The Trump administration's executive order on prescription drug costs represented a significant, albeit imperfect, attempt to tackle the escalating costs of prescription medications. While some provisions aimed at increased transparency and exploring price negotiation showed promise, significant challenges and limitations hindered their full implementation. The ongoing debate surrounding prescription drug pricing necessitates a multi-faceted approach to ensure affordable medications are accessible to all. Stay informed about the ongoing efforts to reduce prescription drug costs and contact your representatives to advocate for policies that make affordable medications accessible to all. Learn more about the impact of the Trump executive order on prescription drug costs and how you can contribute to the solution.