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Executive Order Targets Lower Drug Prices & Enhanced PBM Transparency

  • SiekmannCo
  • May 15
  • 4 min read
Lowering Drug Prices By Once Again Putting Americans First | Executive Order | Siekmann

A Closer Look At Trump's 'Lowering Drug Prices By Once Again Putting Americans First' Executive Order

On April 15, 2025, President Donald Trump issued a significant executive order to address the rising cost of prescription drugs and enhance transparency in the pharmaceutical supply chain, with a particular emphasis on pharmacy benefit managers (PBMs). Titled "Lowering Drug Prices by Once Again Putting Americans First," the order outlines a series of reforms designed to make medications more affordable, improve healthcare efficiency, and foster innovation. By targeting systemic challenges in drug pricing and delivery, this directive aims to benefit patients, employers, and the broader healthcare system.


Strengthening PBM Oversight

A cornerstone of the executive order is its focus on improving transparency in the operations of pharmacy benefit managers, intermediaries that manage prescription drug benefits for health plans. Within 180 days, the Department of Labor is tasked with proposing regulations under the Employee Retirement Income Security Act (ERISA) to ensure employers gain clear visibility into the direct and indirect compensation PBMs receive, including fees paid to brokers.


This initiative responds to growing concerns about PBM practices that may contribute to higher drug costs. By equipping employers with better information, the regulations aim to promote accountability and encourage more cost-effective decisions, fostering a competitive market that prioritizes value for patients.


Reforming Medicare Drug Pricing

The executive order addresses challenges in the Medicare Drug Price Negotiation Program, seeking to maximize its effectiveness. Within 60 days, the Department of Health and Human Services (HHS) will propose guidance to enhance transparency, prioritize high-cost drugs, and minimize impacts on pharmaceutical innovation for 2026–2028. Additionally, within 180 days, recommendations will be developed to stabilize and reduce Medicare Part D premiums, easing financial pressures on beneficiaries.

The order also calls for collaboration with Congress to align pricing policies for small-molecule drugs and biologics, addressing a discrepancy that could skew investment toward costlier treatments. Within one year, HHS will test a payment model to improve value for high-cost drugs not covered by the negotiation program, ensuring Medicare delivers cost-effective care.


Expanding Access To Affordable Medications

To improve access to critical medications, the executive order directs HHS to act within 90 days to condition federal health center grants. This ensures that low-income individuals (those with high cost-sharing, unmet deductibles, or no insurance) can access insulin and injectable epinephrine at or below 340B program discounted prices, plus a minimal fee. This measure aims to provide immediate relief to vulnerable populations.


Fostering Competition & Innovation

The executive order promotes market-driven solutions to lower drug prices:

  • Accelerated Approvals: Within 180 days, the FDA will provide recommendations to streamline approvals for generics, biosimilars, combination products, and over-the-counter drugs, increasing affordable options.

  • Improved Drug Importation: Within 90 days, the FDA will enhance the drug importation program, enabling states to access lower-cost drugs while maintaining safety standards.

  • Addressing Anti-Competitive Practices: Within 180 days, HHS, in collaboration with the Departments of Justice, Commerce, and the Federal Trade Commission, will issue a report to reduce anti-competitive behavior by pharmaceutical manufacturers.


Enhancing Medicare & Medicaid Efficiency

To ensure fair pricing, HHS will survey hospital outpatient drug acquisition costs within 180 days and propose adjustments to align Medicare payments, maintaining budget neutrality. Similarly, recommendations will improve Medicaid drug rebates, link payments to value, and support states in managing drug spending, promoting efficiency across federal programs.


Optimizing Healthcare Delivery

Within 180 days, HHS will propose regulations to ensure Medicare payments do not incentivize shifting drug administration to costly hospital outpatient settings over more affordable physician offices, reducing costs for beneficiaries and taxpayers.


A Path To A More Affordable Healthcare System

This executive order represents a strategic effort to address the complex challenges of prescription drug pricing through transparency, competition, and innovation. By reforming pharmacy benefit managers, enhancing Medicare and Medicaid, and ensuring affordable access to medications, the order lays the foundation for a more equitable and efficient healthcare system. While full implementation will require time, these reforms signal a commitment to prioritizing patient needs and delivering measurable value to the American public.



Overview Of The Executive Order: Lowering Drug Prices & Enhancing PBM Transparency


On April 15, 2025, a new executive order titled "Lowering Drug Prices by Once Again Putting Americans First" was signed, aiming to reduce prescription drug costs and increase transparency in the pharmaceutical industry, with a focus on reforming pharmacy benefit managers (PBMs). The order outlines a comprehensive strategy to improve access to affordable medications, enhance competition, and address systemic issues in drug pricing and healthcare delivery. Key initiatives include strengthening PBM oversight, refining Medicare drug pricing mechanisms, accelerating generic and biosimilar approvals, and ensuring affordable access to critical medications like insulin for low-income individuals.

Key objectives include:

  • PBM Transparency: Directing the Department of Labor to propose regulations within 180 days to improve employer health plan transparency into PBM compensation, addressing opaque practices that contribute to high drug costs.

  • Medicare Reforms: Enhancing the Medicare Drug Price Negotiation Program, stabilizing Part D premiums, and aligning pricing policies for small-molecule drugs and biologics to support innovation.

  • Promoting Competition: Streamlining approvals for generics, biosimilars, and over-the-counter drugs, improving drug importation, and addressing anti-competitive practices by manufacturers.

  • Affordable Access: Conditioning federal grants to provide low-income individuals with affordable insulin and epinephrine, and testing payment models for high-cost drugs.

  • Healthcare Efficiency: Aligning Medicare payments with hospital drug acquisition costs and preventing shifts to costlier care settings.


This executive order seeks to create a more transparent, competitive, and patient-focused pharmaceutical system through targeted regulatory and policy reforms.

 
 
 

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