Executive Action Targets High Drug Costs: What the Industry Needs to Know
On April 15, 2025, President Trump signed the executive order titled “Lowering Drug Prices by Once Again Putting Americans First,” signaling a significant shift in U.S. pharmaceutical policy. This directive aims to reduce prescription drug costs through a multifaceted approach, impacting various aspects of the healthcare industry.
Key Provisions:
Medicare Drug Price Negotiation: The order directs the Department of Health and Human Services (HHS) to enhance the Medicare Drug Price Negotiation Program. This includes prioritizing high-cost drugs and improving transparency to achieve greater savings for beneficiaries.
Alignment of Payment Structures: It proposes aligning Medicare payments for certain prescription drugs with the actual acquisition costs incurred by hospitals, potentially lowering prices by up to 35%. Additionally, the order seeks to standardize payments for treatments like cancer therapies, regardless of the care setting, which could reduce costs by as much as 60%.
Discounted Medications for Low-Income Patients: The executive order reinstates programs to provide insulin and injectable epinephrine at significantly reduced prices for low-income individuals and the uninsured, aiming to make these life-saving medications more accessible.
Facilitation of Drug Importation: It instructs the FDA to streamline the approval process for state-run drug importation programs, potentially allowing states to source medications from countries like Canada to reduce costs.
Acceleration of Generic Drug Approvals: The order calls for the FDA to expedite the approval of generic and biosimilar drugs, fostering competition and potentially leading to lower drug prices.
Implications for the Healthcare Industry:
While the executive order outlines ambitious goals, the industry is looking for additional details. The potential for new tariffs on imported pharmaceuticals, coupled with changes in Medicare payment structures, could disrupt supply chains and affect pricing strategies. Healthcare providers, pharmaceutical companies, and policymakers must navigate these changes carefully to mitigate risks and capitalize on opportunities.
How Lanton Strategies Can Assist:
In this evolving policy landscape, Lanton Strategies offers strategic consulting and lobbying services to help clients understand and influence the implications of the executive order. Our expertise in healthcare policy and regulatory affairs positions us to provide targeted messaging and advocacy efforts, ensuring our clients' interests are represented before the Administration and Congress. Contact us to learn more about how we can help you navigate this period of change.