In a move that could significantly impact millions of Americans, President Donald Trump has signed an executive order rescinding former President Biden’s Executive Order 14087, which was implemented to lower prescription drug costs for Americans.

The rescinded order, signed by Biden on Oct.14, 2022, aimed to address the challenges many Americans face in paying for prescription drugs. It directed the Department of Health and Human Services (HHS) to explore new healthcare payment and delivery models that would lower drug costs and promote access to innovative drug therapies for Medicare and Medicaid beneficiaries.

Trump’s decision to overturn this executive order could have far-reaching consequences for American consumers, particularly seniors and those with chronic health conditions. Under Biden’s order, Medicare beneficiaries were set to benefit from several cost-saving measures, including:

1. A cap on out-of-pocket costs for prescription drugs
2. A $35 monthly cap per prescription for insulin
3. Zero out-of-pocket costs for recommended adult vaccines
4. Medicare’s ability to negotiate prices for selected high-cost prescription drugs

“Too many Americans face challenges paying for prescription drugs. On average, Americans pay two to three times as much as people in other countries for prescription drugs, and one in four Americans who take prescription drugs struggle to afford their medications,” Biden said in 2022. “Nearly three in 10 American adults who take prescription drugs say that they have skipped doses, cut pills in half or not filled prescriptions due to cost.”

The reversal of these policies could potentially lead to increased drug costs for millions of Americans. According to the Biden administration’s estimates, Medicare beneficiaries were expected to save $1.5 billion in 2026, the first year of implementation, with projected savings of $6 billion if negotiated prices had been in effect in 2023.

It’s important to note that this executive order primarily directed the Department of Health and Human Services to explore new healthcare payment and delivery models to lower drug costs. Its rescission does not automatically undo existing laws and regulations.

Key points to consider:

1. Existing laws remain in effect: The Inflation Reduction Act, which includes provisions for Medicare drug price negotiations and other cost-saving measures, remains law. These statutory changes cannot be undone by executive order alone and would require congressional action to repeal.
2. Disruption of momentum: The rescission of the executive order does disrupt the momentum toward developing new cost-saving measures. The Center for Medicare and Medicaid Innovation (CMMI) was working on implementing three new models aimed at improving prescription drug affordability and access. With the executive order revoked, these efforts may be halted or significantly altered.
3. Regulatory uncertainty: While existing regulations remain in place, there is now uncertainty about future drug pricing policies and the federal government’s strategy for managing prescription drug costs.
4. Potential for new directions: The Trump administration could take various approaches to drug pricing, including staying the course with existing laws, watering down implementation, or attempting to repeal programs like Medicare drug price negotiations.

The Trump administration could take various approaches, including:

• Staying the course with existing laws
• Watering down implementation
• Attempting to repeal programs like Medicare drug price negotiations

It’s worth noting that while the executive order has been rescinded, the full impact on drug pricing and healthcare policies will depend on subsequent actions taken by the Trump administration and Congress. The situation remains fluid, and further policy changes may be forthcoming.