Trump executive order is first offensive against Biden efforts to lower drug costs

On his first day back in the White House, President Donald Trump signed an executive order that undercuts three programs aimed at lowering prescription drug prices. Republicans in Congress have already proposed a repeal of 2022 legislation that caps out-of-pocket costs for Medicare Part D subscribers and authorizes the Medicare program to negotiate drug prices with pharmaceutical companies.

In October 2022, President Joe Biden issued Executive Order 14087, directing the secretary of health and human services to take steps to “lower drug costs and promote access to innovative drug therapies for beneficiaries enrolled in the Medicare and Medicaid programs.” 

Following on the order, the Center for Medicare and Medicaid Innovation announced three demonstration models as possible approaches. 

One, known as the Medicare $2 Drug List model, would have given enrollees access to a list of generic medications with a copayment of $2 or less per month. Doing so, the Department of Health and Human Services estimated, would save Medicare Part D enrollees a total of $2 billion annually. The idea was endorsed by the American College of Physicians and the American Hospital Association, but opposed by pharmaceutical companies represented by the Association for Accessible Medicines. 

A second, the Cell and Gene Therapy Access model, would allow states and manufacturers to develop agreements to make cell and gene therapies more available to individuals on Medicaid with rare conditions such as sickle cell disease. 

“These therapeutic approaches are EXTREMELY expensive and it seems the Biden action was intended to attempt to make them more available (via cost constraints or price concessions),” David Kreling, an emeritus professor of pharmacy at the University of Wisconsin-Madison, said in an email.

A third, the Accelerating Clinical Evidence model, would change Medicare Part B payments to incentivize manufacturers of new treatments to quickly complete clinical trials to confirm efficacy and safety. 

On Jan. 20, Trump revoked Biden’s executive order and several others in his own order that read, “The previous administration has embedded deeply unpopular, inflationary, illegal, and radical practices within every agency and office of the Federal Government.” 

Experts told NBC News that Trump’s orders show his priorities. “It could mean that the Trump administration is not interested in pursuing any of the work that has since developed out of these executive orders,” said Vanderbilt University health policy professor Stacie Dusetzina.

While Trump did not explicitly ban the models, he eliminated the order underpinning them, casting doubt on their future.

Maddie Twomey, communications director for the health care advocacy nonprofit Protect Our Care, said in an email: “The fact that Trump rescinded the Biden EO signals he wants to go his own direction on drug pricing (to put it lightly), and could be sending a message to CMMI that they should discontinue those Biden-era demos, which threatens access to $2 generics and access to cutting edge therapies. The primary takeaway from the EO is that he isn’t serious about lowering drug costs for the American people.”

Attempts to reach the White House press office for comment were unsuccessful, and the Centers for Medicare and Medicaid Services did not provide any comment beyond a Jan. 29 statement on the agency’s website, which says, “Lowering the cost of prescription drugs for Americans is a top priority of President Trump and his Administration.”

The action does not affect Biden’s 2022 Inflation Reduction Act, which limited out-of-pocket drug costs for Medicare Part D subscribers to $2,000 per year, capped Medicare subscribers’ monthly insulin copayments at $35, and authorized the federal government to negotiate directly with pharmaceutical companies for lower prices on commonly used prescription drugs. 

Several Republicans in Congress, however, have called for repeal of those protections as well.

Pennsylvania Rep. Scott Perry is one of 16 House Republicans proposing a bill to completely overturn the Inflation Reduction Act.