President Donald Trump signed an executive order aimed at reducing drug prices, speeding up the approval of generic products, and improving the efficiency of the Medicare health program, while offering a concession to pharmaceutical companies.
Trump directed Health Secretary Robert F. Kennedy Jr. to work with Congress to modify the Medicare Prescription Drug Price Negotiation Program.
The program, approved in 2022 as part of the Inflation Reduction Act, allows the government to negotiate with pharmaceutical companies to offer lower-cost drugs to Medicare beneficiaries and includes what drugmakers criticize as the “pill penalty,” which limits the price of certain medications for years after their approval.
The “penalty,” Trump said, “threatens to distort innovation by shifting investment toward expensive biologics, often used to treat rarer diseases, and away from ‘small-molecule’ prescription drugs, which are typically cheaper and serve larger patient populations.”
He also ordered Kennedy Jr. to develop a payment model that would allow Medicare to “achieve better value for high-cost prescription drugs and biologics” covered under the program.
Among other measures, the president aims to “reassess the role of intermediaries” in the pharmaceutical value chain, “accelerate the approval of generics,” and identify prescription drugs that could be “reclassified” for over-the-counter sales in pharmacies.
While the text is vague, it specifically mentions insulin and epinephrine as examples of drugs he wants to make more accessible and affordable for low-income or uninsured individuals.
The order, which also seeks to “increase low-cost imports” of prescription drugs, comes just as Trump is expected to soon announce tariffs on pharmaceutical imports, which have so far been exempt from his trade war.
Kennedy Jr. is also directed to work with the Departments of Justice and Commerce and the Federal Trade Commission to “reduce anticompetitive behavior by pharmaceutical manufacturers.” EFE
