Trump Slashes Drug Costs—But Who Pays?

President Trump’s recent executive action aims to lower Medicare drug prices, but its implications could extend far beyond mere cost reductions.

At a Glance

• President Trump signed an executive order to lower drug prices, allowing states to import medications.
• The initiative modifies a 2022 law and could delay drug eligibility for Medicare price cuts.
• The action aims to ensure seniors receive lower prices while strengthening Medicare negotiations.
• FDA directed to streamline generic drug approval and facilitate state importation programs.

New Directive from Trump

President Trump signed an executive order to lower drug prices, including a provision that allows states to import prescription medications from Canada. This marks a significant shift in U.S. drug policy, as states will have more autonomy in obtaining less expensive drugs. While it pledges to help reduce costs for consumers, the executive order faces criticism for potentially increasing drug prices by modifying existing laws related to Medicare spending.

Watch coverage here.

Another facet of the executive order seeks to delay the timetable for when certain drugs become eligible for Medicare price reductions. By altering the framework initially set by the Inflation Reduction Act, the administration contends they will secure greater savings than the former administration’s efforts. However, experts caution that these adjustments might lead to billions more in Medicare spending, potentially increasing costs to taxpayers.

Expanding Negotiations and Savings

Building on the Medicare drug price negotiation program, the executive action reaffirms a commitment to expanding negotiations with pharmaceutical companies, introducing reforms to safeguard against increased Medicare costs. The directive calls for the Health and Human Services Secretary to collaborate with Congress to address the imbalance between the pricing of small molecule drugs and biologics.