President Donald Trump is targeting prescription drug costs. He signed a wide-ranging Trump drug price executive order. This order directs the Department of Health and Human Services (HHS). HHS will pursue changes to Medicare's drug price negotiations. This move signals a potential shift favoured by drugmakers.
The pharmaceutical industry has lobbied against negotiation timelines. Currently, complex biologics are negotiated after 13 years. Small-molecule drugs, or pills, are eligible after only 9 years. Drugmakers argue this shorter window for pills stifles innovation. The directive may extend the timeline for pills to 13 years.
Details of the Trump Drug Price Executive Order
Medicare's negotiation power came from the Inflation Reduction Act (IRA). Proponents hailed it as a crucial step in controlling spending. However, the pharmaceutical industry has consistently opposed the measure. They especially dislike the different negotiation timelines for drugs.
President Trump cannot change the IRA with an executive order. Instead, this Trump drug price executive order sets a policy goal. It tasks HHS to work with Congress on legislative changes.
White House officials hinted at other proposed changes. They claim these changes will yield greater savings. Savings would exceed those from the first round of negotiations. However, specific details were not provided. The first round saw price cuts up to 79% on 10 drugs. The next round includes 15 drugs like Ozempic and Wegovy.
Broader Measures in the Trump Drug Price Executive Order
This order extends beyond just negotiation timelines. It also includes directives aimed at other cost-cutting measures.
- Site-Neutral Payments: Standardising patient payment rates across healthcare settings. This prevents price variations based on the location of care.
- Aligning Drug Payments: Bringing Medicare payments for drugs closer to hospital rates. This could lower costs by up to 35%.
- Drug Importation: Pushing the FDA to approve more state drug import applications. This builds on an initiative from Trump's first term.
- Generic Approvals: Directing the FDA to streamline approval for generic drugs. This would increase market competition and lower prices.
This Trump drug price executive order follows a national security investigation. The probe into the pharmaceutical sector could lead to future tariffs. These combined actions show a focus on reshaping US drug pricing.