Last week on April 15, the Trump administration announced their latest Executive Order (EO) on pharmaceutical drug price transparency. This latest executive order is largely summarized in two words: "enforcement" and "drugs.” And now that we got a summary out of the way, here’s what we think this new EO means for Pharma and healthcare at large.

Top 6 Take-Aways

The departments have 180 days to turn this EO into an action plan. Here’s the between the lines of what that might look like.

In no particular order:

  1. Reducing Pill Penalty for Medicare: The Medicare Drug Price Negotiation Program, established under the Inflation Reduction Act, is set to be revisited to address the so-called “Pill Penalty." Under the current framework, small molecule drugs (i.e., pills) become eligible for Medicare price negotiations after a nine-year window, whereas biologics are exempted for 13 years post-launch. The goal is to equalize the impact of IRA on both small molecule and biologics.
  2. Medicare’s Site Of Care Reimbursement gets even more transparent: Scrutiny of the difference in reimbursement between hospital and clinic infused centers. Medicare needs to maintain site neutral stance to address shifting in sites of care driven by reimbursement.
  3. More PBMs/GPOs transparency: Promotion of competition and transparency for the patient in a complex drug value chain so that patients, doctors, and employers can see the actual cost of prescription drugs in advance of prescribing or purchasing.
  4. Promote competition in high-cost therapy areas: A focus on accelerating biosimilar and generic availability to drive cost-effective adoption.
  5. Employers and PBMs, the plot thickens: A closer eye on self-insured employer's fiduciary responsibility by providing transparency into fees and rebates received by PBMs.
  6. Hospital Acquisition Cost Survey: Development of a survey to determine the hospital acquisition cost for covered outpatient drugs at hospital outpatient departments. This might result in adjustment to Medicare payment rates similar to 2018 where CMS reimburses 340B covered entities at ASP -22.5%.

Seeing this through

This continues the momentum of price transparency in 2025 and builds upon the last Executive Order, which sets the stage for a potential launch of Part D drug data in payer machine-readable files. Those were initially required in July 2022, but enforcement was ultimately delayed.

In short there are two dates to look out for:

  • May 26th, 2025: First report from Trump’s Transparency EO is due
  • October 12th, 2025: Updated PBM regulations are due from this current EO

What’ll happen? Who’s to say. Either way, we’ll be on the look out.