President Trump signs an executive order to slash prescription drug costs, enabling states to import cheaper medications from Canada while tackling pharmaceutical price inflation across America.
Key Insights
- Trump’s April 15 executive order authorizes state drug importation programs from Canada, which could reduce U.S. prescription costs by up to 42%.
- Florida becomes the first state approved for Canadian drug imports after a three-year approval process that will now be expedited for other states.
- The order improves Medicare drug price negotiations and adjusts payment structures to align with actual supplier costs, addressing current overpayments.
- Low-income patients could receive insulin for as little as 3 cents per vial under specialized discount programs.
- FDA approval processes for generic and biosimilar medications will be streamlined, potentially reducing drug prices by up to 80%.
Expanding Access to Affordable Medications
President Donald Trump took decisive action on April 15, 2025, signing an executive order aimed at reducing prescription drug costs for American patients. The comprehensive order addresses multiple aspects of drug pricing, with a strong focus on enabling states to import lower-cost medications from Canada. This initiative builds upon a framework established in 2020 under section 804 of the Food, Drug and Cosmetics Act, which permitted states to import certain prescription drugs with FDA approval. Florida recently became the first state to receive such authorization after navigating a lengthy three-year approval process.
The executive order specifically instructs the FDA to improve and expedite this approval process, encouraging more states to apply for Canadian import authorization. This approach shows promise for substantial savings, as analysis by KFF found that U.S. per-capita spending on prescriptions is 42% higher than in Canada. By removing barriers to legal importation, the administration aims to create more competitive pricing and greater affordability for American patients who often struggle with exorbitant prescription costs.
🚨 NEW: President Donald J. Trump just signed an Executive Order to expand on the historic efforts of his first term to lower prescription drug prices.
The Order directs the Department of Health and Human Services to take steps to significantly reduce drug prices for American…
— Rapid Response 47 (@RapidResponse47) April 15, 2025
Medicare Reform and Price Transparency
A cornerstone of the executive order involves revisiting and improving the Medicare Drug Pricing Negotiation Program. Under the new directives, Medicare will gain enhanced ability to negotiate drug prices with pharmaceutical companies, with the initial lowered prices for ten drugs scheduled to take effect on January 1, 2026. The order also addresses a persistent issue in the current system – Medicare overpayments for prescription medications – by adjusting payment structures to align more closely with suppliers’ actual costs.
“Today, President Donald J. Trump signed an Executive Order to expand on the historic efforts of his first term to lower prescription drug prices,” wrote The White House.
President Trump’s approach targets middlemen in the pharmaceutical supply chain as well. The Department of Labor has been directed to establish new rules requiring disclosure of broker fees, creating greater transparency in a notoriously opaque system. These measures aim to ensure that discounts and savings actually reach patients instead of being absorbed by intermediaries. The order specifically emphasizes helping seniors, who typically face the highest medication costs, by providing significant discounts on life-saving medications.
Expanding Generics and Addressing Critical Medications
The executive order places substantial emphasis on accelerating the approval process for generic and biosimilar medications, which typically cost a fraction of their brand-name counterparts. By streamlining FDA procedures, the administration aims to bring these affordable alternatives to market more quickly, potentially reducing prices by up to 80% for many commonly prescribed medications. Additionally, Health and Human Services Secretary Robert F. Kennedy Jr. has been tasked with addressing the pharmaceutical industry’s emphasis on developing expensive large-molecule drugs over more affordable small-molecule alternatives.
“President Trump is dedicated to creating a transparent, competitive, and fair prescription drug market for American consumers,” The White House wrote.
Insulin affordability receives special attention in the executive order. Dr. Mehmet Oz has been directed to further reduce insulin prices, potentially allowing low-income and uninsured patients to receive insulin for as little as 3 cents per vial. This dramatic reduction would represent life-changing savings for millions of Americans with diabetes who currently struggle to afford this essential medication. Similar provisions extend to injectable epinephrine and other critical medications that many patients depend upon for survival.
Sources:
- Trump’s Tariff Threat for Drug imports Poses Big Political Risks – The New York Times
- Trump signs healthcare executive order that includes a win for pharma companies | Reuters
- Fact Sheet: President Donald J. Trump Announces Actions to Lower Prescription Drug Prices
