This is part four of a series of executive orders related to health care.
Price Transparency
Most Favored Nation Drug Pricing Executive Order
May 12, 2025
President Trump signed an executive order (EO) titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” The order’s stated goal is to lower the cost of prescription drugs by setting a 30-day deadline for drug manufacturers to electively bring down prices. The premise of the EO is the “unreasonable and discriminatory” practices by foreign companies that result in Americans paying higher costs for prescription drugs as compared to peer countries globally. The president argues these higher prices subsidize the health care of other countries.
The order directs:
- The Secretary of Health and Human Services (HHS) to create target price points for direct-to-consumer purchasing programs for pharmaceutical manufacturers to sell their products to American patients, bypassing health insurance at lower prices. This is to be accomplished within 30 days.
- The U.S. Trade Representative and the Department of Commerce to take action against “unreasonable and discriminatory policies” that lower drug prices abroad.
Additionally, the order outlines possible regulatory actions for the administration to take towards pharmaceutical companies that fail to voluntarily lower prices, including directing the Secretary of HHS to develop a new rule to implement the changes. Other possible actions include allowing increased imports of drugs, reviewing drug exports and allowing the FDA to modify or revoke existing approvals granted to drugs that may be “unsafe, ineffective or improperly marketed.”
The order is similar to a rule President Trump promulgated in 2020 during his first term. That rule was quickly rescinded by President Biden in 2021. Even before its revocation, several district courts blocked the implementation of the order, citing the administration’s improper process to implement it. The current order, however, goes beyond the previous measure, because it is not limited to Medicare nor to a certain number or class of drugs.
A few aspects of the order remain unclear, including the extent to which it will affect drug prices within private health insurance, since HHS primarily maintains authority over the Medicare and Medicaid programs.
Moreover, it is unclear the extent of authority the executive branch has over drug price negotiations between private companies and other nations. It is also unclear whether the administration would have the legal authority to enforce the order and its provisions if pharmaceutical companies do not voluntarily lower prices.
Actions to Lower Prescription Drug Prices
April 15, 2025
President Trump issued a sweeping executive order touching upon a number of issues in health care, and pharmaceuticals in particular. The executive order provides few details but in some areas signals policies the administration may be leaning toward. In brief, the order:
- Directs the development of policies to address the perceived imbalance in the Medicare drug negotiations between small and large molecules.
- Resurrects Trump’s first administration’s policy requiring federal health clinics to pass mandated drug discounts to patients to lower the cost of certain drugs.
- Takes initial steps toward a policy that would align Medicare payments with the price hospitals pay for 340B drugs.
- Directs the Department of Health and Human Services (HHS) to consider ways to equalize Medicare payments for cancer and other drugs administered at inpatient and outpatient hospitals by studying and proposing regulations to ensure that payment with the Medicare program is not encouraging a shift in drug administration volume away from less costly physician office settings to more expensive hospital outpatient departments.
- Resurrects the policy from the first term to give insulin to low-income individuals, including the uninsured, in some cases, as low as three cents a vial, plus a small administration fee, and injectable epinephrine as low as $15 per auto injector.
- Requires recommendations within 90 days on how to “promote a more competitive, efficient, transparent and resilient pharmaceutical value chain that lowers drug prices.”
- Directs the development of a report providing administrative and legislative recommendations to accelerate the approval of generics, biosimilars, combination products and second-in-class brand name medication and improve the process by which prescription drugs can be reclassified as over the counter medication,
- Directs the development of recommendations to ensure manufacturers pay accurate Medicaid drug rebates and promote innovation in Medicaid drug payment methodologies, link payments for drugs to the value obtained and support States in managing drug spending.
- Requires the Food and Drug Administration (FDA) to streamline and improve the Importation Program under Section 804 of the Federal Food Drug and Cosmetic Act to “make it easier for states to obtain approval without sacrificing safety or quality.”
- Requires the Secretary of Labor to propose regulations to address employer health plan fiduciary transparency into the direct and indirect compensation received by pharmacy benefit managers.
- Requires HHS to conduct joint public listening sessions with the departments of Justice and Commerce and the Federal Trade Commission (FTC) and issue a report with recommendations to reduce anticompetitive behavior from pharmaceutical manufacturers.
Actions to Make Health Care Prices Transparent
Feb. 25, 2025
This Executive Order is designed to reinforce actions in the previous Trump administration to achieve health care price transparency. The order directs:
- The Departments of the Treasury, Labor and Health and Human Services to rapidly implement and enforce the Trump health care price transparency regulations, which were slow walked by the prior administration.
- The departments will ensure hospitals and insurers disclose actual prices, not estimates, and take action to make prices comparable across hospitals and insurers. This includes prescription drug prices.
- The departments will update their enforcement policies to ensure hospitals and insurers comply with price transparency requirements.
Legal Actions: None
Accountability in Policy
Ensuring Accountability for All Agencies
Feb. 18, 2025
This Executive Order provides for more presidential scrutiny of the actions including guidance and regulations of independent agencies. The order requires:
- The Office of Management and Budget (OMB) to establish performance standards and management objectives for independent agency heads.
- OMB to review independent regulatory agencies’ obligations for consistency with the president’s policies and priorities and consult with the agencies’ leadership and adjust the agencies apportionments by activity and function.
- Independent agencies to create the position of White House Liaison.
- Agency chairman to submit agency strategic plans developed in pursuant to the Government Performance and Results Act of 1993 to OMB for clearance before finalization.
For health care, this means that actions at the Federal Trade Commission (FTC) in the health sector are likely to be reviewed by OMB for consistency with the administration’s policies and goals.
Legal Action: None
Implementing The President’s “Department of Government Efficiency (DOGE)” Cost Efficiency Initiative
Feb. 26, 2025
The purpose of this Executive Order is to begin to change federal discretionary spending on contracts, grants and loans to ensure government spending is transparent and government employees are accountable to the American public. The EO explicitly excludes direct assistance to individuals, expenditures related to immigration enforcement, law enforcement, the military, public safety and the intelligence community and other critical, acute or emergency spending as determined by the relevant agency head. The order requires:
- Agency heads to build a centralized technological system within the agency to seamlessly record every payment issued by the agency along with a brief written justification for each payment submitted by the agency employee who approved the payment.
- Once the system is in place, the agency head shall issue guidance, in consultation with DOGE, to require that the agency employee promptly submit a brief written justification prior to that employee’s approval of a payment under covered contracts and grants, subject to any exceptions the agency head deems appropriate.
- Each agency head, in consultation with DOGE, shall review all existing covered contracts and grants and where appropriate and consistent with applicable law, terminate or modify covered contracts and grants to reduce overall federal spending or reallocate spending to promote efficiency and advance the policies of the administration.
- Each agency will review contracting policies, procedures and personnel and shall not issue or approve new contracting officer warrants during the review period, unless the agency head determines such approval is necessary. Following the review the agency head shall issue guidance on signing new contracts or modifying existing contracts to promote efficiency and the policies of the administration.
Legal Action: None
Click here to read part one of this series of executive orders related to health care.
Click here to read part two of this series of executive orders related to health care.
Click here to read part three of this series of executive orders related to health care.
