President Trump Issues Executive Orders Signaling Goals for Health Care

John M. Burke, MD

Hematologist and Medical Oncologist

Rocky Mountain Cancer Centers

Associate Chair

US Oncology Hematology

Research Program

Aurora, CO

President Donald J. Trump has signaled that lowering the costs of prescription drugs will be a priority for his second term. On April 15, 2025, he issued a series of executive orders stating how he intends to achieve such price reductions and what he plans to do with the Inflation Reduction Act (IRA) created during the administration of President Joseph R. Biden. Here, I will provide a partial list of those executive orders, briefly explaining their implications.¹

1. Section 3 is titled, “Improving upon the Inflation Reduction Act.” The immediate implication is that Trump intends not to dismantle the IRA but instead to modify it.

2. Section 3(a). Within 60 days, the Secretary of Health and Human Services (HHS), Robert F. Kennedy Jr, must propose guidance for the Medicare Drug Price Negotiation Program for years 2026, 2027, and 2028 to improve transparency and to minimize the negative impact of reductions in drug prices on pharmaceutical innovation. Translation: This order is responding directly to complaints of pharmaceutical companies that the reduction in the prices of drugs is a disincentive to innovation and drug development, and the process of drug negotiation of drugs prices that CMS has established is “not transparent” to pharmaceutical companies. To me, this order suggests that the process of price negotiation will continue, but that the Centers for Medicare & Medicaid Services (CMS) will be asked to provide parameters that define the value of drugs and explain what CMS will be expecting from pharmaceutical companies during these negotiations.

3. Section 3(c). The secretary of HHS and the US Congress will “align the treatment of small molecule prescription drugs with that of biological products, ending the distortion that undermines relative investment in small molecule prescription drugs.” Translation: This order addresses the so-called “pill penalty,” whereby the IRA makes small molecule drugs (likely orally administered) eligible for the price negotiation process 7 years after approval by the FDA, whereas large molecule drugs, or biologics (most likely intravenously administered), are not eligible for price negotiation until 11 years after FDA approval. The rule has been criticized as promoting pharmaceutical investment toward biological products and away from small molecule drugs. Most likely, the new order will lead to extending the protection period for small molecule drugs to 11 years.

4. Section 5. HHS must conduct a survey to determine the costs hospitals acquiring drugs and then adjust payments to the hospitals that will “align” the payment with the acquisition cost. Translation: This order seems to be proposing a reevaluation of the 340B drug discount program, by which eligible hospitals acquire drugs at a discounted rate, leading to large profit margins for the hospitals. Modifications to the 340B program may be coming.

5. Section 9. Within 180 days, HHS must propose ways to accelerate approval of generics and biosimilars. Although this order seems straightforward, accelerating approval of generics and biosimilars could discourage innovation and new drug development. In addition, the tariffs proposed by Trump may threaten the viability of generic drug manufacturers.

6. Section 8 and Section 12. Within 90 days, HHS must “provide recommendations…to promote a more competitive, efficient, transparent, and resilient pharmaceutical value chain,” and the secretary of labor must propose regulations to require transparency regarding the compensation of pharmacy benefit managers. Translation: These orders are taking aim at pharmacy benefit managers, which have been criticized for their opaque, anticompetitive practices that increase costs of prescription drugs. Expect regulation of their activities.

7. Section 11. Within 180 days, HHS must propose regulations to ensure that CMS is not encouraging administration of drugs in more expensive hospital outpatient departments as compared with less expensive physician office settings. Translation: This order appears to be addressing the “site neutrality” issue, whereby hospital outpatient departments charge more money for services (like chemotherapy administration) than physician office settings. However, the order notably does not say that payments for these services must become site neutral.

8. Section 13. Within 180 days, HHS must make recommendations to reduce anticompetitive behavior of pharmaceutical manufacturers. Examples of such anticompetitive behavior include “pay-for-delay” patent settlements, in which brand-name manufacturers pay generic or biosimilar companies to delay their entry into the market, price fixing, and many others.

For the sake of space, I have provided only a partial list of these executive orders, and my explanations are brief. Although these orders do not immediately change much, they signal that the president intends to take many actions that have major implications for the health care system.

REFERENCE:

Lowering Drug Prices by Once Again Putting Americans First. Fed Regist. 2025;90(74):16441-16444. https://tinyurl.com/5x3ccb7t