On 15 April 2025, President Donald Trump signed an Executive Order (EO) titled “Lowering Drug Prices by Once Again Putting Americans First.”¹ The stated purpose of the EO is to broaden access to pharmaceutical products through lower prices. In particular, three policy issues are highlighted:

1. Price differences for the same drugs between the US and foreign countries.
2. Price transparency throughout the pharmaceutical supply chain.
3. Promoting competition, especially the role of generics and biosimilars as alternative products.

Pricing

The EO consists of 14 sections and outlines several approaches to address these issues. Most of these sections do not mandate specific immediate actions, but there are four notable orders (sections 3, 4, 7, and 10) in which the EO assigns relevant agencies to implement specific directives aimed at lowering drug prices. We summarize the main sections and their relevance to the policy issues, beginning with those addressing prices:

1. Section 3 orders the Secretary of Health and Human Services (Secretary) to work with Congress to modify the Medicare Drug Price Negotiation Program so biologics, which sometimes have rarer disease indications and high Medicare costs, receive the same treatment as small molecules under the program.
2. Section 4 orders the Secretary to implement a new payment model that obtains a “better value” for pharmaceutical drugs covered under the Medicare program. This section discusses the possibility of including drugs that are not currently subject to Medicare negotiation.
3. Section 7 orders the Secretary to make future grants to health centers conditional on grant recipients making insulin available at or below a discounted price under the 340B program for certain low-income individuals.
4. Section 10 orders the Secretary to streamline the Section 804 Importation Program (SIP) to make it easier for states to obtain approval to import prescription drugs.

The other orders primarily seek recommendations from the relevant agencies to better understand the next steps for policy implementation. Section 11 seeks to understand regulations that could reduce Medicare spending by addressing incentives that shift the volume of drug administration from physician offices to hospital outpatient settings but does not specify immediate changes in the regulatory environment.

Transparency and Competition

To address price transparency, the EO directs the Secretary to conduct a survey to determine hospital acquisition costs for outpatient drugs (section 5), to provide recommendations to try to ensure the accuracy of drug rebates paid by manufacturers under the Medicaid program (section 6), and to propose regulations to increase transparency in the compensation structure for pharmacy benefit managers (PBMs) by employer-sponsored health plans (section 12).

The rest of the orders focus on the goal of improving competition. More specifically, the EO seeks to understand how to promote lower prices by evaluating the role of intermediaries in the pharmaceutical industry chain (section 8) and accelerating the approval of generics, biosimilars, and reclassification of drugs as over-the-counter medication (section 9). The EO also assigns the Secretary to conduct a joint session with the Department of Justice, the Department of Commerce, and the Federal Trade Commission to offer recommendations on reducing anticompetitive manufacturer behavior (section 13).

In conclusion, the Executive Order signed by President Trump on 15 April 2025, titled “Lowering Drug Prices by Once Again Putting Americans First,” expresses an effort to address three policy areas of concern: price reduction, transparency in the pharmaceutical supply chain, and enhanced competition. The directives encompass a range of actions that are meant to bring cost savings for seniors and low-income individuals through targeted reforms to Medicare, the 340B program, and drug importation processes. The Executive Order claims to deliver savings for patients and promote competition, but the impact of this executive order is yet to be determined, and we have not evaluated the likely impacts of the EO. Reimbursement programs, supply chains, and price negotiation may be subject to change under this mandate, and stakeholders may face significant changes in the regulatory environment.

¹ Donald J. Trump, ”Lowering Drug Prices by Once Again Putting Americans First,” Executive Order 14273, Federal Register 90, no. 75 (18 April 2025): [Federal Register Document Number 2025-06837], available at https://www.federalregister.gov/documents/2025/04/18/2025-06837/lowering-drug-prices-by-once-again-putting-americans-first.