Trump Reverses Lower Drug Cost Effort for Medicare, Medicaid

TL/DR –

President Trump has rescinded an executive order by former President Joe Biden aimed at reducing drug costs for Medicare and Medicaid beneficiaries. The rescinded order contained provisions for capping the copayment for generic medications at $2 for Medicare beneficiaries and for Medicare to pay less for drugs that receive accelerated approval from the Food and Drug Administration. The rescindment also affects a program to help state Medicaid programs pay for expensive but effective cell and gene therapy treatments.

Trump Rescinds Executive Order Aimed at Lowering Medication Costs for Medicare Beneficiaries

President Donald Trump recently overturned several executive orders by former President Joe Biden, including initiatives aimed at reducing prescription-drug costs and improving access to cell- and gene-therapy treatments for Medicare and Medicaid beneficiaries.

One such initiative was a bid to cap the copayment for generic medications at $2 for Medicare beneficiaries. Trump also discontinued a program that would reduce Medicare’s expenditure on drugs that receive accelerated approval from the Food and Drug Administration (FDA).

The scrapped cell- and gene-therapy program aimed to assist state Medicaid programs in affording highly effective, but expensive, therapies. The Center for Medicare and Medicaid Innovation had already commenced state enrollment in the pilot program.

Despite these initiatives being in varying development stages, Trump’s reversal effectively halts efforts to reduce drug costs for Medicare and Medicaid beneficiaries.

Experts argue such a move contradicts Trump’s previous commitment to lowering drug costs, which was a key aspect of his first-term health-policy agenda.

The Inflation Reduction Act, which allows Medicare to negotiate certain prescription drug prices, remains an area of uncertainty. Any reversal on these initiatives could significantly impact Medicare spending and beneficiaries’ out-of-pocket costs.

Medicare successfully negotiated lower prices for 10 drugs in the first round of discussions, with these prices to become effective from January 2026. Negotiations for 15 more drugs are scheduled for 2025, with any agreed prices to take effect in 2027.

Analysts believe prescription drug costs for Medicare recipients shouldn’t be subject to executive orders. Instead, they argue that such costs should be law-dictated, and it’s Congress’s responsibility to alleviate costs for beneficiaries and taxpayers.

Without a mandatory law requiring Medicare to negotiate all drug prices with pharmaceutical companies, Medicare recipients, among other Americans, may continue to pay some of the world’s highest drug costs.

No immediate comment was available from Trump’s spokesperson on this matter.

—
Read More US Economic News