On April 15, 2025, President Trump issued an Executive Order (the EO) titled, “Lowering Drug Prices By Once Again Putting Americans First,” directing HHS to take action on a list of specific proposals with the goal of lower prescription drug costs for Americans. Notably for hospitals, the EO directs the Secretary to conduct a survey to determine the hospital acquisition costs of drugs at hospital outpatient departments and to propose regulations to ensure that Medicare payments do not drive drug administration volume away from physician offices to hospital outpatient departments.
One of the focuses of the EO includes plans to make changes to the Inflation Reduction Act, including seeking comments on the Medicare Drug Price Negotiation Program to improve its transparency and prioritize selection of prescription drugs with high costs to Medicare while trying to minimize negative impacts of imposing a maximum fair price on pharmaceutical innovation. The EO also directs HHS to prepare, within one year, a rulemaking plan to create a payment model to improve the ability of the Medicare program to obtain better value for high-cost prescription drugs and biological products covered by Medicare (including those not subject to the Medicare Drug Price Negotiation Program).
Within ninety days of the EO, the Secretary of HHS is directed to take action to ensure grants under the Public Health Service Act Section 330(e) are conditioned on health centers establishing practices to make insulin and injectable epinephrine available at or below the discounted price under the 340B Prescription Drug Program to low-income individuals. The EO also directs the Secretary to take steps, within ninety days, 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.
The EO contains several directions to the Secretary that must be accomplished within 180 days of the EO, including to:
- Publish in the Federal Register a plan to conduct a survey to determine the hospital acquisition cost for covered outpatient drugs at hospital outpatient departments with the purpose of making adjustments to Medicare payments;
- Issue a report providing administrative and legislative recommendations to accelerate approval of generics, biosimilars, combination products, and second-in-class brand name medications; and improve the process through which prescription drugs can be reclassified as over-the-counter medications, including recommendations to better identify prescription drugs that can be safely provided to patients over the counter;
- Propose regulations to ensure that payment within 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;
- Propose regulations under ERISA to improve employer health plan fiduciary transparency into the direct and indirect compensation received by pharmacy benefit managers; and
- Conduct joint public listening sessions, including individuals from the DOJ, FTC, and Department of Commerce, and then issue a report with recommendations to reduce anti-competitive behavior from pharmaceutical manufacturers.
The full text of the Executive Order, “Lowering Drug Prices By Once Again Putting Americans First,” is available here.
