Lowering Drug Prices by Once Again Putting Americans First
This document is an executive order titled “Lowering Drug Prices by Once Again Putting Americans First,” signed by President Donald J. Trump in April 2025. It directs multiple federal agencies—primarily the Department of Health and Human Services (HHS), the Office of Management and Budget (OMB), the Department of Labor, and the Food and Drug Administration (FDA)—to take a series of actions intended to lower prescription drug costs for Americans. The order aims to reinvigorate earlier price-reduction efforts (including through Medicare/Medicaid, drug importation, price transparency, and curbing middlemen), while preserving incentives for innovation. It lays out specific timelines for proposed guidance, rulemaking, and studies across Medicare, Medicaid, and related programs, and asks agencies to consider reforms that could reduce costs for seniors, low-income patients, and taxpayers, while expanding competition and improving pricing transparency. Important caveat: as an executive order, this document directs agencies to propose or implement changes within existing law and appropriations. It does not by itself create new laws; its impact depends on subsequent rulemaking, regulatory action, and any necessary statutory changes by Congress. If implemented, the order could shift how Medicare, Medicaid, and other federal programs pay for drugs, influence drug availability and prices, and affect the behavior of manufacturers, wholesalers, and middlemen.
Key Points
- 1Medicare price negotiation and small-molecule alignment. The order directs the HHS Secretary to propose and seek comment on guidance for the Medicare Drug Price Negotiation Program to apply in 2028, with consideration of maximum fair prices for 2026-2028. It also asks to align how small-molecule drugs (typically pills/tablets) are treated with biologics to avoid underinvestment in smaller drugs, while prioritizing high-cost drugs and maintaining incentives for innovation. A separate 180-day action calls for recommendations on stabilizing and reducing Medicare Part D premiums.
- 2New Medicare value-based payment and cost transparency measures. The order directs development of a rulemaking plan within a year to test a payment model that improves value for high-cost drugs and biologics covered by Medicare, including those not currently subject to the negotiation program. It also requires a plan to assess hospital acquisition costs for outpatient drugs and consider adjustments to align payments with actual costs, within budget neutrality rules.
- 3Expanded access to life-saving medications for low-income patients. The order requires conditioning certain health center grants under the 340B Drug Program on practices that ensure insulin and injectable epinephrine are available at or below the discounted price paid by the health center under 340B, with a minimal administration fee, to individuals with low incomes who have high cost-sharing, high unmet deductibles, or no health insurance.
- 4Competition, middlemen, and importation reforms. The order calls for improving the pharmaceutical value chain to be more competitive, transparent, and resilient; increasing prescription drug importation to lower prices by streamlining the FDA’s Importation Program to help states gain approvals more easily while maintaining safety; and promoting greater oversight of middlemen and anti-competitive behavior by manufacturers, including public listening sessions and a report with recommendations.
- 5Accelerating competition and cost-saving measures across the system. The order asks the FDA Commissioner to issue a report within 180 days with recommendations to speed up approvals of generics, biosimilars, and second-in-class products, and to make it easier to reclassify certain prescription drugs to over-the-counter status where safe. It also directs actions to reduce costly care for seniors by ensuring Medicare payments don’t unintentionally shift drug administration from low-cost settings to higher-cost hospital outpatient departments, and to increase transparency around pharmacy benefit manager (PBM) fee disclosures and rebates.