On his first day back in office, President Donald Trump revoked a series of Biden-era executive orders, including one designed to lower prescription drug costs for Medicare and Medicaid beneficiaries. The move, which eliminates Executive Order 14087, has drawn sharp criticism from Democrats and healthcare advocates, who see it as a significant setback for affordability and access to essential medications.
The executive order, signed by President Biden in 2022, tasked the Department of Health and Human Services (HHS) with exploring innovative payment and delivery models to reduce drug costs. The directive aimed to build on the healthcare cost provisions in the Inflation Reduction Act (IRA) and proposed strategies such as capping co-pays for generic drugs and pooling state Medicaid resources to negotiate better prices for high-cost specialty drugs.
Trump dismissed the order as part of what he called Biden’s “unpopular, inflationary, illegal, and radical practices.” However, critics argue that the rollback undermines efforts to address the rising costs of prescription medications for millions of Americans.
The Biden administration had made strides in tackling prescription costs, with HHS publishing a 2023 report on potential reforms. One proposal under consideration involved allowing Medicare Part D sponsors to offer 150 high-value generic drugs with a $2 monthly co-payment cap. Another proposed initiative would have coordinated multi-state agreements to leverage collective bargaining power for specialty drug discounts. Despite the potential benefits, none of these models were implemented during Biden’s term.
Several measures enacted under the IRA remain in place, including a $2,000 annual out-of-pocket cap for Medicare beneficiaries, which took effect this year. Additionally, reduced prices for the first 10 drugs selected for Medicare negotiations will begin in 2026. Temporary rebates saved dozens of prescriptions in 2024, offering immediate relief for some beneficiaries.
Trump’s decision has reignited the debate over how best to address drug pricing, with Democrats accusing him of prioritizing pharmaceutical industry interests over public health.
“Donald Trump is already following through on his dangerous plans to jack up the costs of drugs to appease his billionaire backers,” said Alex Floyd, the Democratic National Committee’s Rapid Response Director. “Trump is proving once again that he lied to the American people and doesn’t care about lowering costs – only what’s best for himself and his ultra-rich friends.”
Rescinding the executive order means the innovative models proposed by Biden’s administration are now off the table. The $2 co-pay for generic drugs would have been a game-changer for many Medicare beneficiaries, particularly those on fixed incomes. Similarly, the multi-state outcomes-based agreements could have reduced Medicaid costs by streamlining negotiations for high-cost medications, addressing inefficiencies that burden state agencies.
This rollback comes amid broader healthcare policy reversals under Trump’s second administration. Republicans argue that scaling back government intervention will reduce costs in the long run. Advocates, however, warn that these actions could leave vulnerable populations struggling to afford their medications.
HHS data shows that many Medicare beneficiaries already face challenges affording their prescriptions, with some skipping doses or forgoing treatments altogether. Critics of Trump’s decision argue that it exacerbates financial strain for millions of Americans who depend on affordable access to essential drugs.
The Biden administration also explored ways to incentivize drug manufacturers to complete confirmatory clinical trials for drugs approved under accelerated approval. At the time of the 2023 report, nearly one-third of drugs approved through this process had incomplete trials, leading to increased costs for the Centers for Medicare and Medicaid Services (CMS)—the proposal aimed to reduce spending on delayed trials while promoting accountability within the pharmaceutical industry.
Trump’s supporters contend that rescinding these measures will cut red tape and foster innovation, but opponents see it as a gift to pharmaceutical companies at the expense of everyday Americans. As Democrats push back against these rollbacks, they will likely highlight the tangible benefits of the IRA provisions still in effect, framing Trump’s actions as a step backward in the fight for affordable health care.
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