President Trump Signs Executive Order to Bring Down Drug Prices

In an effort to lower drug prices for Americans, President Donald Trump signed an executive order directing leaders of HHS, CMS, and the Office of Management and Budget (OMB) to come up with meaningful actions to lower drug costs.1

“Safe, effective, and lower-cost biosimilars are the clear answer to America’s skyrocketing prescription drug costs, and the Biosimilars Forum applauds the Trump Administration for taking decisive action to support biosimilars in its ‘Lowering Prescription Drug Prices’ Executive Order,” wrote Juliana M. Reed, executive director of the Biosimilars Forum, in a statement.2

In addition to fostering better sustainability within the small-molecule space, encouraging more competition and innovation across the board, biologics and biosimilars were not left out in the cold.1 The executive order highlighted that biosimilars can cost up to 80% less than reference biologics, generating major savings—$56 billion to date—with the potential to save up to $181 billion more in the next 5 years, including substantial savings for Medicare.2 Although biologics represent just 3% of prescriptions, they account for 46% of US drug spending, which surged from $100 billion to $260 billion over the past decade. This rise disproportionately affects seniors, small businesses, and middle-class families.

The new order instructs several authorities to investigate and report on factors known to influence drug costs, including possible solutions the president could take to best address cost barriers.1 The new order outlines 13 directive actions:

1. The secretary of HHS to issue guidance to improve the transparency of the Medicare Drug Price Negotiation Program and focus on high-cost drugs, while minimizing impacts on pharmaceutical innovation.
2. The assistant to the president for domestic policy, in coordination with HHS, OMB, and the assistant for economic policy, to recommend ways to stabilize and reduce Medicare Part D premiums.
3. HHS to work with Congress to align the treatment of small molecule drugs with biologics in the Medicare Drug Price Negotiation Program (DPNP), without raising overall Medicare costs.
4. HHS to develop and implement a new Medicare payment model to obtain better value for high-cost drugs and biologics, including those not covered by the negotiation program.
5. HHS to conduct a hospital outpatient acquisition cost survey and propose adjustments to Medicare payments to better reflect drug acquisition costs.
6. OMB, domestic policy, and economic policy officials, in coordination with HHS, to recommend ways to ensure accurate Medicaid drug rebates, promote value-based payment models, and support states in managing drug spending.
7. HHS to require health centers receiving certain federal grants to offer insulin and injectable epinephrine at or below 340B prices (plus minimal fees) to low-income, underinsured, or uninsured individuals.
8. The Domestic Policy Council, with HHS, OMB, and economic policy officials, to recommend ways to improve competition, efficiency, transparency, and resilience in the pharmaceutical supply chain.
9. The FDA commissioner to issue a report with recommendations to accelerate the approval of generics, biosimilars, combination products, and certain brand name drugs, and to improve over-the-counter drug reclassification processes.
10. The FDA commissioner to streamline the prescription drug importation program to help states obtain approval more easily without compromising safety or quality.
11. HHS to evaluate and, if appropriate, propose regulations that prevent Medicare payment policies from incentivizing costlier hospital-based drug administration over physician offices.
12. The secretary of labor to propose regulations to increase employer health plan transparency into pharmacy benefit manager (PBM) compensation.
13. HHS, in coordination with the Department of Justice, Department of Commerce, and Federal Trade Commission, to hold public listening sessions and issue recommendations to reduce anticompetitive behavior by pharmaceutical manufacturers.

Notably, the president noted that this order would be “improving upon the Inflation Reduction Act” (IRA), by instructing HHS to issue guidance that improves transparency in Medicare drug price negotiations and prioritizes drugs that carry high costs for the American people.

The first 10 drugs chosen for the program included 2 set to face biosimilar competition before the decade closes out (Stelara, ustekinumab; Enbrel, etanercept), which was supposed to be a disqualifying factor for being chosen.3 The first of the new prices chosen by CMS will go into effect in 2026, with more medications and prices to be announced in coming years.

This provision has been a hotly debated topic, with some arguing that the DPNP may delay access to new medicines, reduce the incentive to invest in research and development, reduce the amount of available information to establish clinical guidelines, and encourage insurers to restrict access for the selected drugs.4

Trump’s order also included measures to increase the affordability for insulin and injectable epinephrine for patients, following on CMS’ model for capping out-of-pocket (OOP) costs on insulins for seniors during President Trump’s first administration, which was signed in to law by former-President Joe Biden as part of the IRA.1,5,6 However, prior to the Senate vote, efforts to expand OOP caps to the private insurance sector were rejected.7

Accelerating the approval and development of biosimilars is a long-standing goal embraced by both Republicans and Democrats, as emulated through numerous bipartisan bills introduced in the House and Senate.8,9,10 Biosimilars typically cost $100 million to $300 million over 6 to 9 years, with clinical trials accounting for more than half of both budgets and timelines.11 Additionally, delays in manufacturing facility inspections, patent litigation cases, and requirements for comparative efficacy and switching study data, among other factors can result in extended exclusivity periods for more expensive reference agents and delayed market entry for bioismilars.12

“The Trump Administration recognizes the importance of developing biosimilars efficiently based on science—rather than being slowed down by bureaucracy. The Biosimilars Forum is excited to work with the Trump Administration and the FDA to streamline development of biosimilars,” Reed commented.2

The executive order comes after an IQVIA Institute for Human Data Science report declared a “biosimilar void” earlier this year, showing that of the 188 biologics losing exclusivity in the next 10 years, only 12 have biosimilars in development, highlighting a large, missed opportunity for biosimilar developers.13 If the report that FDA commissioner is directed by the order to create proves fruitful, the Trump Administration could be poised to implement real changes to encourage biosimilar investment.

Addressing PBM practices is a continuation of provisions posed by the Biden Administration, in which the FTC developed a report in response to concerns from doctors and advocates about the impact of PBMs on drug pricing and patient care.14 Since the FTC’s original investigation in 2022, the Commission published 2 reports concluding that the largest PBM firms in the nation were harming independent pharmacies, despite their original goal of reducing expenses.

When Trump began his second presidential term, some experts questioned whether he could continue to be as tough on drug pricing and PBMs as he was during his first term,15 with the present executive order showing that lowering prescription drug prices for Americans remains a priority.

References

1. Lowering drug prices by once again putting Americans first. The White House. April 15, 2025. Accessed April 16, 2025. https://www.whitehouse.gov/presidential-actions/2025/04/lowering-drug-prices-by-once-again-putting-americans-first/

2. Biosimilars Forum Applauds the Trump Administration for Drug Pricing Executive Order. Press release. Biosimilars Forum; April 16, 2025. Accessed April 16, 2025. https://biosimilarsforum.org/2025/04/16/biosimilars-forum-applauds-the-trump-administration-for-drug-pricing-executive-order/

3. Mattina C. CMS releases list of 10 drugs subject to price negotiation under IRA. AJMC®. August 29, 2023. Accessed April 16, 2025.  https://www.ajmc.com/view/cms-releases-list-of-10-drugs-subject-to-price-negotiation-under-ira

4. IRA & the Medicare Drug Price Negotiation Program. National Pharmaceutical Council. Accessed April 16, 2025. https://www.npcnow.org/topics/health-spending/ira-medicare-drug-price-negotiation-program

5. Jeremias S. CMS launches model that caps insulin co-pays at $35. The Center for Biosimilars®. March 11, 2020. April 16, 2025. https://www.centerforbiosimilars.com/view/cms-launches-model-that-caps-insulin-copays-at-35

6. Vazquez M, Judd D. Biden signs Inflation Reduction Act into law. CNN. August 16, 2022. Accessed April 16, 2025. https://www.cnn.com/2022/08/16/politics/biden-inflation-reduction-act-signing/index.html

7. Jeremias S. $35 insulin cap for private sector blocked from budget reconciliation bill. The Center for Biosimilars. August 8, 2022. Accessed April 16, 2025. https://www.centerforbiosimilars.com/view/-35-insulin-cap-for-private-sector-blocked-from-budget-reconciliation-bill

8. Jeremias S. The increasing access to biosimilars act of 2023 introduced to Congress. The Center of Biosimilars. March 29, 2023. Accessed April 16, 2025. https://www.centerforbiosimilars.com/view/the-increasing-access-to-biosimilars-act-of-2023-introduced-to-congress

9. Jeremias S. Senators Reintroduce the Increasing Access to Biosimilars Act. The Center for Biosimilars. March 25, 2024. Accessed April 16, 2025. https://www.centerforbiosimilars.com/view/senators-reintroduce-the-increasing-access-to-biosimilars-act

10. Jeremias S. Senators introduce bipartisan legislation to protect skinny labeling. The Center for Biosimilars January 2, 2025. Accessed April 16, 2025. https://www.centerforbiosimilars.com/view/senators-introduce-bipartisan-legislation-to-protect-skinny-labeling

11. Fontanillo M, Körs B, Monnard A. Three imperatives for R&D in biosimilars. McKinsey & Company. August 19, 2022. Accessed April 16, 2025. https://www.mckinsey.com/industries/life-sciences/our-insights/three-imperatives-for-r-and-d-in-biosimilars

12. Jeremias S. Breaking down biosimilar barriers: the patent system. November 11, 2024. Accessed April 16, 2025. https://www.centerforbiosimilars.com/view/breaking-down-biosimilar-barriers-the-patent-system

13. Jeremias S. The biosimilar void: 90% of biologics coming off patent will lack biosimilars. The Center for Biosimilars. February 5, 2025. Accessed April 16, 2025. https://www.centerforbiosimilars.com/view/the-biosimilar-void-90-of-biologics-coming-off-patent-will-lack-biosimilars

14. Jeremias S. FTC releases second report on PBMs meddling in generic drug markets. The Center for Biosimilars. January 19, 2025. April 16, 2024. https://www.centerforbiosimilars.com/view/ftc-releases-second-report-on-pbms-meddling-in-generic-drug-markets

15. King R. Trump revives war with payers and PBMs over future of Medicare Part D rebates. Fierce Pharma. July 27, 2020. Accessed April 16, 2024. https://www.fiercehealthcare.com/payer/trump-revives-war-payers-and-pbms-over-future-medicare-part-d-rebates