President Trump's Executive Order Aims to Lower Drug Prices by Aligning Small Molecule Drug Policy with Biologics

In a recent move aimed at reducing prescription drug costs, President Donald Trump has issued an executive order to modify the Medicare Drug Price Negotiation Program. This initiative specifically seeks to ease the negotiation process for small molecule drugs, aligning their regulatory treatment with that of biologics. The executive order, signed on 15 April, addresses the challenges of the Inflation Reduction Act's complex regulatory framework, which according to Trump, failed to deliver expected savings.

The directive mandates the Secretary of Health and Human Services, Robert F. Kennedy Jr., to work closely with Congress and restructure the negotiation timeframe for small molecule drugs, which currently allows Medicare to negotiate prices nine years post FDA approval—four years sooner than for biologics. This discrepancy has discouraged investments in small molecule drugs, which are typically cheaper and more broadly applicable compared to their biologic counterparts. Extension of the negotiation period could foster greater innovation and extended profitability for pharmaceutical companies.

Additionally, the executive order includes measures to decrease Medicare Part D premiums and enhance access to affordable medications such as insulin and epinephrine for low-income patients. It also introduces initiatives to increase accountability and transparency among Pharmacy Benefit Managers (PBMs), a move driven by recent criticism over PBMs' opaque pricing and their role in escalating healthcare costs. These developments underscore a broader federal effort to improve healthcare affordability and efficiency within the U.S.