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New Executive Order Takes Aim at Lowering Prescription Drug Costs
AARP also calls on Congress to protect and strengthen Medicare’s ability to negotiate lower drug prices for millions of older Americans
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President Trump on Monday signed an executive order that aims to cut Americans’ prescription drug costs by bringing the price the U.S. pays for its medications in line with comparable developed nations.
The order directs the U.S. Department of Health and Human Services (HHS) to communicate most-favored-nation price targets to pharmaceutical companies in the next 30 days. If manufacturers do not make significant progress toward these targets, additional steps could be taken, though many questions remain on how the plan will work, specifically, and when Americans could expect to see any potential savings. The order also intends to ensure that other countries are not engaged in practices that help drive higher prescription drug prices in the U.S.
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In his first term, Trump issued a similar order to bring the price of Medicare Part B drugs — medications typically administered in a doctor’s office or health care setting — in line with other countries. The order, however, faced legal challenges and never took effect.
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Americans pay significantly higher prices for prescription drugs than people in other countries. An analysis from HHS and RAND Health Care found that in 2022, U.S. prices across all drugs (brands and generics) were nearly 2.78 times as high as prices in other countries included in the study. About 8 in 10 U.S. adults say the cost of prescription medication is unreasonable, a recent KFF poll found, and they see profits made by pharmaceutical companies as a key reason for soaring prices.
AARP supports efforts to lower the costs of prescription drugs
In response to the executive order, AARP issued a statement thanking the president for his focus on reining in prescription drug prices — an effort long championed by AARP. The statement also urges Congress to defend the current law that cuts prescription drug costs for millions of older Americans by allowing Medicare to negotiate drug prices.
“For too long, big drug companies have been ripping off America’s seniors — charging the highest prices in the world for lifesaving prescriptions, padding their profits at the expense of American lives, and forcing older adults to skip medications they can’t afford,” said Nancy LeaMond, AARP executive vice president and chief Advocacy and engagement officer. “We look forward to reviewing the details and understanding how these changes will affect seniors’ pocketbooks.”
In the statement, LeaMond also called on Congress to protect current provisions in the AARP-backed 2022 prescription drug law that gives Medicare the historic power to negotiate lower prices on costly and commonly used prescription medications. Proposed legislation would disrupt this process by making it more difficult for Medicare to negotiate lower prices for certain drugs.
Lower prices for the first 10 prescription drugs selected for Medicare negotiation, which treat everything from diabetes and heart disease to cancer and kidney issues, are expected to save Medicare prescription drug plan enrollees a collective $1.5 billion in out-of-pocket expenses when they take effect in 2026. The prices of 15 more prescription medications will be negotiated this year, and additional drugs will be selected every year following.
“AARP has fought hard to give Medicare the power to negotiate lower drug prices — because no senior should have to choose between buying food and filling a prescription,” LeaMond said. “We strongly support efforts to bring down drug costs, including safe importation from other countries, and we urge Congress to take additional action to protect and strengthen Medicare’s ability to get the best deal for seniors, especially those most burdened by high prices.”
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