President Donald Trump signed a sweeping executive order on Tuesday that aims to delay Medicare’s ability to negotiate prices for most prescription drugs, marking a significant victory for the pharmaceutical industry. The order directs Health and Human Services Secretary Robert F. Kennedy Jr. to work with Congress to modify the Medicare drug price negotiation framework established under the Biden administration’s Inflation Reduction Act.
The directive proposes extending the current nine-year delay before Medicare can begin negotiating prices for small-molecule drugs—primarily pills and capsules—to thirteen years, matching the timeline for more complex biologic drugs. Small-molecule medications make up roughly 90 percent of all prescriptions in the United States, meaning the proposed delay could have far-reaching effects on healthcare costs for millions of seniors.
“Trump just caved to Big Pharma—again,” said the advocacy group Protect Our Care in a statement following the announcement. “His new executive order pushes to delay Medicare drug price negotiations, giving drug companies four extra years to price gouge seniors. The only winners here are the drug companies.”
The president’s order comes at a pivotal time for Medicare reform. Under the Inflation Reduction Act, the Biden administration had initiated the first-ever Medicare drug price negotiations, securing discounts of up to 79 percent on the first round of ten high-cost drugs covered by the program. The administration is currently negotiating prices for a second group of fifteen medications, including Novo Nordisk’s diabetes and weight-loss drugs Ozempic and Wegovy, as well as Pfizer’s cancer treatments Ibrance and Xtandi.
But Trump’s executive order threatens to reverse this progress by adopting the pharmaceutical industry’s demands nearly word for word. The first section of the order labels the difference in negotiation timelines between biologics and pills as a “pill penalty”—a term coined and popularized by the pharmaceutical lobby.
That phrase has been featured in advertisements by groups like Seniors 4 Better Care, a campaign that, according to reporting by Sludge journalists Donald Shaw and David Moore, is “not really a seniors group, but rather a front for a lobbyist-led shell group called the American Prosperity Alliance.” These ad campaigns have aggressively targeted Trump’s inner circle in an effort to shape the administration’s healthcare policy.
“Further delaying Medicare drug price negotiation would lead to higher prices for patients and taxpayers, not lower ones,” said Steve Knievel, a drug policy advocate at Public Citizen. “Empowering Medicare to negotiate drug prices is the only significant legislative measure taken to address Big Pharma price gouging in the last 40 years. Now Trump proposes to undermine that singular achievement.”
Knievel continued, “Extending negotiation delay periods is nothing but a total capitulation to the demands of drug corporation lobbyists that want to continue to overcharge Medicare beneficiaries and taxpayers.”
The pharmaceutical industry has consistently opposed the Medicare negotiation program since its inception, arguing that it would stifle innovation and limit profits needed to fund research and development. Yet, the industry’s most immediate concern has centered around the negotiation timelines, with lobbying groups pushing Congress and the White House to extend the delay for small-molecule drugs to match that of biologics.
Earlier this year, Republican lawmakers—many of whom receive significant campaign contributions from the pharmaceutical industry—introduced legislation to do just that. The introduction of Trump’s executive order closely mirrors the objectives outlined in those proposals.
“Make no mistake,” said Merith Basey, executive director of Patients for Affordable Drugs, “this is yet another attempt by Big Pharma to rig the system in its favor—at the expense of patients.”
While the president’s executive order cannot directly alter the provisions of the Inflation Reduction Act, which are statutory, it signals a clear intent to reshape the law through congressional action. Trump’s directive instructs Secretary Kennedy to collaborate with lawmakers to revise the eligibility timeline and other components of the program.
In addition to the proposed delay in drug negotiations, the order includes other healthcare policy initiatives. It calls for Medicare payments for drugs to be aligned with hospital reimbursement rates, which are often 35 percent lower, and for a shift toward “site-neutral” payments, meaning patients would be charged the same regardless of where they receive care. The order also directs the Food and Drug Administration to expedite approvals for generic and biosimilar alternatives and encourages states to apply for drug importation programs—of which only Florida has received FDA authorization so far.
Despite the White House framing the order as a cost-saving measure, health policy experts warn that extending the negotiation timeline would allow pharmaceutical companies to continue charging inflated prices to Medicare for longer periods, resulting in higher costs for both patients and taxpayers.
With Medicare covering over 66 million Americans—most of them seniors—the potential consequences of delaying price negotiations could ripple through the entire U.S. healthcare system.
Any legislative changes to the negotiation schedule will require congressional approval. But with Trump’s support, the pharmaceutical industry’s position has been dramatically elevated, and efforts to weaken the negotiation program could gain momentum in the months ahead.
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