New Order Aims to Slash Prescription Drug Costs for Americans
Published Date: 4/18/2025
Presidential Document
Summary
This new order puts Americans first by bringing back strong actions to lower prescription drug prices. It targets drug companies charging U.S. patients more than people in other countries and pushes for cheaper generics, better price transparency, and fairer discounts. These changes aim to save patients money starting now and keep drug costs down for years to come.
Analyzed Economic Effects
13 provisions identified: 13 benefits, 0 costs, 0 mixed.
Medicare negotiation guidance update
Within 60 days of April 15, 2025, the Department of Health and Human Services must propose guidance to improve transparency and prioritization in the Medicare Drug Price Negotiation Program for initial price applicability year 2028 and manufacturer effectuation in 2026–2028. If you have Medicare, this targets how the program will pick and negotiate prices for high-cost drugs used by Medicare.
Plans to stabilize Medicare Part D premiums
Within 180 days of April 15, 2025, White House domestic policy staff and HHS will give recommendations on how to stabilize and reduce Medicare Part D premiums. If you are in a Medicare Part D plan, this could affect future premiums and plan choices.
End the "pill penalty" for fair pricing
The order directs HHS to work with Congress to align how small molecule drugs (pills, tablets) and biological products are treated in the Medicare Drug Price Negotiation Program to end the earlier imposition of price controls on small molecules. If you have Medicare, this seeks to prevent policies that favor biologics over small molecule drugs.
Payment model for high-cost Medicare drugs
Within 1 year of April 15, 2025, HHS must develop and implement a rulemaking plan and select a payment model to get better value for high-cost prescription drugs and biological products covered by Medicare. If you have Medicare, this could change how expensive drugs are paid for and how much Medicare (and possibly you) pay for them.
Medicaid rebate and payment recommendations
Within 180 days of April 15, 2025, OMB and White House policy staff, in coordination with HHS, must recommend ways to ensure manufacturers pay accurate Medicaid drug rebates, promote innovation in Medicaid drug payment methods, and link payments to value to help States manage drug spending. If you are enrolled in Medicaid, these recommendations could affect how drugs are paid for and managed in your state.
Low-cost insulin and epinephrine at health centers
Within 90 days of April 15, 2025, future federal grants under section 330(e) must be conditioned so health centers make insulin and injectable epinephrine available at or below the grantee's 340B discounted price (plus a minimal administration fee) to people with low incomes, high cost-sharing for those drugs, high unmet deductibles, or no insurance. If you are uninsured or have high cost-sharing or high deductibles, this could make those medicines available at lower prices at certain health centers.
Accelerate generics, biosimilars, OTC switches
Within 180 days of April 15, 2025, the FDA must issue a report with administrative and legislative recommendations to speed approval of generics, biosimilars, combination products, and second-in-class drugs, and to improve the process for switching prescription drugs to over-the-counter. This aims to increase competition and give patients cheaper alternatives.
Streamline drug importation program for States
Within 90 days of April 15, 2025, the FDA must take steps to streamline and improve the drug Importation Program under section 804 of the Food, Drug, and Cosmetic Act to make it easier for States to obtain approval while maintaining safety and quality. This aims to let States bring in lower-cost imported drugs for residents.
Reevaluate middlemen in drug supply chain
Within 90 days of April 15, 2025, White House policy staff shall provide recommendations on promoting a more competitive, efficient, transparent, and resilient pharmaceutical value chain to deliver lower drug prices for Americans. This aims to address the role of intermediaries that can affect the final price you pay for medicines.
Survey hospital drug acquisition costs
Within 180 days of April 15, 2025, HHS must publish a plan to survey hospital acquisition costs for outpatient drugs and then consider payment adjustments to better align Medicare payment with acquisition cost, subject to budget neutrality rules. This could affect Medicare payment rates for drugs administered in hospital outpatient departments.
Prevent costly shifts to hospital outpatient care
Within 180 days of April 15, 2025, HHS shall evaluate and, if appropriate, propose regulations to ensure Medicare payment rules do not encourage moving drug administration from less costly physician offices to more expensive hospital outpatient departments. If you have Medicare, this could help avoid higher settings of care that raise overall costs.
PBM fee disclosure for employer plans
Within 180 days of April 15, 2025, the Department of Labor must propose regulations under ERISA section 408(b)(2)(B) to improve employer-plan fiduciary transparency into direct and indirect compensation received by pharmacy benefit managers. If you get insurance through your employer, this may increase disclosure about fees and payments that affect plan costs.
Public hearings to curb pharma anti‑competitive acts
Within 180 days of April 15, 2025, HHS will hold public listening sessions with the Department of Justice, Department of Commerce, and the Federal Trade Commission and issue a report with recommendations to reduce anti-competitive behavior by drug manufacturers. This aims to protect competition and lower drug prices for consumers.
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