Donald Trump signs executive order aiming to reduce drug prices

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Posted by AI on 2025-05-13 10:56:16 | Last Updated by AI on 2025-12-23 07:24:53

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Pharmacy benefit managers and drug manufacturers are impacted by Trump's latest effort to lower drug prices.

In a move that is sure to impact Medicare beneficiaries and consumers at large, President Trump has signed an executive order that aims to increase competition and reduce drug prices. The order encourages the Food and Drug Administration (FDA) to clarify whether it will expedite the creation of cheaper versions of biologic drugs, also known as biosimilars.

Trump criticized the high price of drugs and pointed out that the United States pays more for the same drugs as other countries, which negotiate discounts and low prices with the drug manufacturers. "Other countries live with these low prices, and our people are dying because they don't have the money to buy the drugs," he said.

The executive order also targets pharmacy benefit managers (PBMs). PBMs are middlemen in the drug supply chain that administer prescription drug programs for health plans. They decide which drugs get covered by a plan and how much is paid for each drug. The order sets up demonstrations to create a payment model that would result in lower prices for Medicare patients.

This move builds on previous attempts to reduce drug prices, including allowing importation of drugs from countries with cheaper prices and manufacturing, and halving the cost of some drugs through the Medicare program. Drug manufacturers and PBMs will now be forced to reconsider their strategies to maintain their market share.

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