Special Poll
President Trump has rescinded a range of executive orders from the Biden era, including one specifically targeted at examining new ways to reduce prescription drug costs for Medicare and Medicaid recipients. This action eliminated former President Biden’s Executive Order 14087, titled “Lowering Prescription Drug Costs for Americans,” which Trump categorized as part of a series of measures he considered “unpopular, inflationary, illegal, and radical practices.”
Biden’s executive order had directed the Secretary of Health and Human Services (HHS) to investigate innovative payment and delivery models aimed at reducing medication costs and enhancing access to new drug therapies for those enrolled in Medicare and Medicaid. It suggested models that could lower out-of-pocket expenses for commonly prescribed medications and encourage value-based care, aligning with broader healthcare cost reduction goals set forth in the Inflation Reduction Act (IRA).
The Centers for Medicare and Medicaid Services (CMS) pursued this directive, producing a report in 2023. The report explored various models, including one proposed by then-HHS Secretary Xavier Becerra, which would have allowed Medicare Part D plans to offer about 150 high-value generic medications at a maximum co-payment of $2 for a month’s supply.
Additionally, HHS considered a mechanism to encourage drug manufacturers to promptly complete necessary clinical trials, proposing CMS develop new payment methods for drugs given accelerated approval. This model aimed to cut CMS expenses on overdue clinical confirmatory trials, noting that about a third of drugs approved through this fast-track process had pending confirmatory trials.
Another explored model suggested CMS could manage multi-state outcomes-based agreements with makers of costly specialty drugs, pooling bargaining power across states to negotiate better prices, rather than having state Medicaid agencies work individually.
Despite these exploratory steps, none of these models were implemented during the Biden administration. Nonetheless, several initiatives from Biden’s tenure aimed at reducing prescription costs for Medicare beneficiaries are set to be introduced during Trump’s second term. These include a new IRA rule capping Medicare out-of-pocket drug expenses at $2,000 starting this year, price reductions for the first 10 drugs selected for Medicare price negotiations beginning in 2026, and temporary savings achieved last year through the Medicare rebate program.