President Trump Signs Executive Order Launching Strategy to Lower Drug Costs

On April 15, 2025, President Trump issued an Executive Order EO 14273 titled, “Lowering Drug Prices By Once Again Putting Americans First”.  To achieve EO 14273’s core focus to lower Medicare drug costs, specific agencies have been called upon to complete time-sensitive tasks. 

Here is a review of the key elements of EO 14723 which have potential to provide cost relief to employer-sponsored health plans.

Within 60 days of the signed order:

The Secretary of Health and Human Services (Secretary) shall initiate a guidance proposal for the Medicare Drug Price Negotiation Program’s initial price applicability year scheduled for 2028, and the manufacturer effectuation of maximum fair price to occur in 2026, 2027, and 2028.  After which the Secretary will request comments about the guidance proposal. 

The intended objective of the Medicare Drug Price Negotiation Program is to:

• Improve the program’s transparency,
• Select which prescription drugs with high costs will be referred to the Medicare program, and
• Reduce potential damaging effects that the maximum fair price may cause pharmaceutical innovation in the United States.

Within 90 days of the signed order:

On or before July 14, 2025, specific agencies shall provide the President with recommendations on how to create an improved pharmaceutical supply chain that will provide consumers with a dependable and transparent source that includes reduced pricing. 

Within 180 Days of the signed order:

 On or before October 12, 2025, the following actions are to be completed:

• The Department of Labor shall recommend regulations to enhance the employer-sponsored health plan fiduciary transparency as to the compensation provided directly or indirectly to Pharmacy Benefit Managers (PBMs).
• The Food and Drug Administration shall present recommendations for administrative and legislative guidance to:
  1. accelerate approval of generics, biosimilars, combination products, and second-in-class brand name medications, and
  2. improve the process through which prescription drugs can be reclassified as over-the-counter medications, including recommendations to optimally identify prescription drugs that can be safely provided to patients over the counter.
• The Secretary along with key representatives from the Department of Justice, the Department of Commerce, and the Federal Trade Commission shall conduct joint listening sessions and issue recommendations to reduce anti-competitive behavior from pharmaceutical manufacturers. 

Will EO 14723 help employer-sponsored health plans and their participants?

The methods for which EO 14723 intends to accomplish to lower drug costs for Medicare are likely to create peripheral improvements for employer-sponsored health plans.  An improved pharmaceutical supply chain with lower prices, transparency as to the direct and indirect compensations that PBMs receive, and an accelerated process to introduce over-the-counter drug options are likely to positively impact the employer-sponsored health plan costs. 

What does this mean for Employers?

The design of EO 14723 with its staggered due dates means that employers must remain patient while the various agencies complete their assigned tasks.  It is expected that the earliest that potential rules may be published could occur in the weeks following the completion of the October 12, 2025, tasks. 

The Fedeli Group will continue to monitor the roll out of EO 14723 and will provide updates as additional information becomes available. 

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The Fedeli Group Compliance Alerts are designed specifically and solely for informational purposes. The information provided by The Fedeli Group’s Compliance Alert is not intended to be, nor should it be, interpreted as conferring legal advice to the reader of the Compliance Alert.