Fact Sheet: President Donald J. Trump Announces Actions to Lower Prescription Drug Prices

4/15/2025

Fact Sheets

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Action Summary

Executive Order Overview: Signed by President Trump on April 15, 2025, to further reduce prescription drug prices building off efforts from his first term.
Departmental Directives:
- Medicare Savings: Improve the Medicare Drug Pricing Negotiation Program to exceed the initial 22% savings.
- Cost Alignment: Adjust Medicare payments to match the lower acquisition costs by hospitals (up to 35% lower).
- Standardized Pricing: Set uniform payments for drugs such as cancer treatments, potentially reducing costs by as much as 60%.
Discounts for Low-Income Patients:
- Insulin: Reduced to as low as $0.03 plus a small administrative fee.
- Injectable Epinephrine: Priced as low as $15 plus a small administrative fee.
State-Level Initiatives:
- Drug Importation: Facilitate programs that could save states millions in prescription costs.
- Sickle-Cell Medications: Expand programs to secure better discounts on expensive drugs in Medicaid.
Enhancing Market Transparency and Competition:
- Generic and Biosimilar Promotion: Increase availability of alternatives that can be up to 80% less expensive than brand names.
- PBM Reforms: Improve disclosure of fees paid by pharmaceutical benefit managers and reform the drug value chain to ensure fairness and transparency.
Patient-First Focus:
- Historical Progress: Builds on successful initiatives from President Trump’s first term, such as expedited generic drug development, mandated price transparency, and insulin copay caps for Medicare.
- Policy Critique: Highlights the Biden-Harris Administration’s shortcomings in achieving projected savings and maintaining patient-centric policies.

Risks & Considerations

The Executive Order’s focus on lowering prescription drug prices could impact Vanderbilt University Medical Center (VUMC) by altering reimbursement rates for medications, particularly those used in cancer treatments and other specialized care. This may affect the financial planning and budgeting for VUMC.
Changes in Medicare payment structures and the introduction of standardized payments could lead to adjustments in how VUMC negotiates and manages its drug procurement and pricing strategies.
The emphasis on transparency and competition in the prescription drug market may require VUMC to adapt its procurement processes and relationships with pharmaceutical companies and benefit managers.
Vanderbilt’s research programs focusing on drug development and healthcare policy may need to align with the new regulatory environment, potentially affecting funding opportunities and research directions.

Impacted Programs

Vanderbilt University Medical Center (VUMC) will likely need to reassess its financial strategies and drug procurement processes in response to changes in Medicare drug pricing and reimbursement policies.
The School of Medicine may see increased demand for research and expertise in pharmaceutical economics and healthcare policy, presenting opportunities for collaboration with federal agencies and industry partners.
Vanderbilt’s Health Policy Center could play a crucial role in analyzing the impacts of these policy changes and advising on best practices for healthcare providers and policymakers.
The Office of Research may need to explore new funding avenues and partnerships to support research initiatives aligned with the Executive Order’s goals of transparency and competition in the drug market.

Financial Impact

The restructured Medicare payment system and focus on lowering drug prices could impact VUMC’s revenue streams, necessitating adjustments in financial planning and resource allocation.
Vanderbilt University may experience changes in its research funding landscape, particularly if federal grants prioritize projects that align with the Executive Order’s objectives of reducing drug costs and increasing market transparency.
There may be opportunities for Vanderbilt to secure funding for research and development in pharmaceutical policy and healthcare economics, particularly through collaborations with the Department of Health and Human Services and other federal agencies.
As the prescription drug market becomes more competitive and transparent, there could be shifts in the partnerships and collaborations that Vanderbilt engages in, potentially affecting research and development initiatives.

Relevance Score: 4 (The order presents a need for potential major changes or transformations of programs.)

Key Actions

Vanderbilt University Medical Center (VUMC) should evaluate the impact of the executive order on its prescription drug procurement and pricing strategies. By aligning with the new Medicare payment structures, VUMC can potentially reduce costs for patients and improve access to affordable medications.
The Department of Health Policy at Vanderbilt should conduct research on the implications of increased transparency and competition in the prescription drug market. This research can provide valuable insights into how these changes affect healthcare delivery and patient outcomes, positioning Vanderbilt as a leader in health policy analysis.
Vanderbilt’s School of Medicine should explore partnerships with pharmaceutical companies to develop and promote the use of generics and biosimilars. By engaging in collaborative research and development, the school can contribute to lowering drug costs and enhancing treatment options for patients.
The Office of Federal Relations should monitor developments in state-level drug importation programs and assess opportunities for Vanderbilt to participate in or support these initiatives. This could involve advocacy for policies that facilitate access to lower-cost medications for the university community.
Vanderbilt’s Center for Health Services Research should investigate the effects of the executive order on low-income patients’ access to life-saving medications. By analyzing data and outcomes, the center can inform policy recommendations and support efforts to improve healthcare equity.

Opportunities

The executive order presents an opportunity for Vanderbilt’s School of Nursing to expand its role in patient education regarding prescription drug costs and options. By providing resources and guidance, the school can empower patients to make informed decisions about their medications.
Vanderbilt can capitalize on the focus on transparency by developing educational programs and workshops for healthcare professionals on the new pricing and procurement strategies. This initiative can enhance Vanderbilt’s reputation as a leader in healthcare education and innovation.
The emphasis on reducing insulin and epinephrine costs offers an opportunity for Vanderbilt’s Diabetes Center to engage in outreach and support programs for low-income and uninsured patients. By providing access to affordable medications, the center can improve patient outcomes and community health.
By engaging with policymakers and industry stakeholders, Vanderbilt can position itself as a thought leader in the national conversation on prescription drug pricing reform. Hosting conferences and public forums on the implications of the executive order can further establish Vanderbilt as a hub for innovative healthcare policy and practice.

Relevance Score: 4 (The order presents the potential for major process changes required for Vanderbilt’s healthcare programs due to impacts on drug pricing and procurement.)

Average Relevance Score: 2.8

Timeline for Implementation

N/A – No explicit deadlines or specific implementation timelines are provided in the text.

Relevance Score: 1

Impacted Government Organizations

Department of Health and Human Services (HHS): This executive order directly instructs HHS to take significant steps to lower prescription drug prices, putting it at the forefront of implementing the outlined strategies.
Centers for Medicare & Medicaid Services (CMS): As the administrator of the Medicare program, CMS is implicated in reforms such as the Medicare Drug Pricing Negotiation Program and the standardization of Medicare payments for prescription drugs.

Relevance Score: 1 (Only 1 or 2 Federal Agencies are impacted by the order.)

Responsible Officials

Department of Health and Human Services – Charged with implementing directives to lower prescription drug prices, including improvements to the Medicare Drug Pricing Negotiation Program and payment realignment measures.

Relevance Score: 4 (Directives affect the agency head of HHS, who is responsible for nationwide policy implementation on prescription drug pricing.)