President Donald Trump has ordered the Department of Health and Human Services to standardize Medicare payments in an effort to curb prescription drug prices, including with private insurers. Photo by frolicsomepl/Pixabay
President Donald Trump has ordered the Department of Health and Human Services to standardize Medicare payments in an effort to curb prescription drug prices, including with private insurers.
“Combined, these bold actions were delivering real savings for American patients and set the foundation to dramatically narrow the price disparity between the United States and foreign nations over time,” said the executive order that Trump signed Tuesday.
This directive to HHS Secretary Robert F. Kennedy Jr. comes as Trump seeks to impose specific tariffs on pharmaceutical imports on top of other ones, including a baseline 10% for most trading partners. Market research group Black Book Research found that 84% of experts predict that prices for medical treatments and drugs will rise due to the tariffs, according to a survey released in February.
Between January 2022 and January 2023, prescription drug prices rose more than 15% and reached an average of $590 per drug, according to the Department of Health and Human Services in 2023. Of the 4,200 drugs on that list, 46% of the increases exceeded the rate of inflation.
In 2024, the United States imported $213 billion in medicines, which is 2 1/2 times higher than a decade earlier, with Germany, India, Ireland, Singapore and Switzerland major suppliers of pharmaceuticals.
Major drug companies outside the United States include Teva in Israel, Novo Nordisk in Denmark, AstraZeneca in Britain and Novartis in Switzerland. U.S. companies are Eli Lilly, Merck, Pfizer, Roche and Johnson and Johnson.
“We don’t make our own drugs anymore,” Trump told reporters Monday. “The drug companies are in Ireland, and they’re in lots of other places, China.”
Trump wants to equalize Medicare payments for drugs, including the treatment of cancer, regardless of where the patients get care. The White House in a fact sheet said the directive can lower costs by as much as 60%.
Also, Medicare payment for certain prescription drugs that hospitals pay for would be matched, which can result in 35% lower costs than what the government pays to acquire those medications.
And sought: lowering insulin prices for low-income patients or those who are uninsured to as little as 3 cents and injectable epinephrine for treating allergic reactions to as low as $15.
In 2022, President Joe Biden signed into law the Inflation Reduction Act, which included requiring Medicare Part D plans to charge no more than $35 per month for all covered insulin products, and also limits cost sharing for insulin covered under Part B to $35 per month.
The Medicare Drug Price Negotiation Program allows Medicare to directly engage in negotiating prescription prices with drug companies. Private insurers do this.
Trump wants to improve on the 22% in savings that the Biden administration achieved, according to a White House fact sheet.
“The guidance shall improve the transparency of the Medicare Drug Price Negotiation Program, prioritize the selection of prescription drugs with high costs to the Medicare program, and minimize any negative impacts of the maximum fair price on pharmaceutical innovation within the United States,” the order said.
Also, the Food and Drug Administration was asked to work with Congress to quicken Medicare price negotiations for biosimilars, which are complex biologic medicine, compared with small molecule drugs, typically pills.
“My first term included numerous significant actions, including some of the most aggressive in recent history, to deliver lower prescription drug prices to American patients,” Trump said in the order. “The message was clear: no longer would the executive branch sit idly by as pharmaceutical manufacturers charged patients in our Nation more than those in other countries for the exact same prescription drugs, often made in the exact same places.”
During Trump’s first administration, states were allowed to more easily import drugs from Canada and required federally qualified health centers, to pass along discounts they receive on insulin and EpiPens to their patients. The Biden administration ended the rule for health centers, citing the excessive administrative costs and burdens imposed on them.
CMN reported the measures didn’t result in making medications more affordable.
