The broad strokes (by the Grok AI)
Reviving the "Most Favored Nation" (MFN) Pricing Model:
Trump aims to tie U.S. drug prices for certain Medicare-covered medications to the lowest prices paid by other wealthy countries. This policy, initially proposed in his first term (2020) but blocked by courts and rescinded by the Biden administration, seeks to address the disparity where Americans pay significantly more for the same drugs. The MFN model would apply to a selection of drugs, potentially including Medicare Part B drugs (administered in clinics or hospitals), though specifics on scope remain unclear. The 2020 version estimated savings of $85 billion over seven years.
Improving the Medicare Drug Price Negotiation Program:
The plan builds on the Medicare Drug Price Negotiation Program established by the Inflation Reduction Act (IRA) of 2022. Trump’s executive order from April 15, 2025, directs the Department of Health and Human Services (HHS) to propose guidance within 60 days to enhance transparency, prioritize high-cost drugs for negotiation, and minimize impacts on pharmaceutical innovation. The goal is to achieve greater savings than the 22% reported in the program’s first year and address issues like inflated premiums and reduced coverage options for seniors under Medicare Part D.
Promoting Competition and Transparency:
The plan emphasizes increasing competition by accelerating the approval of generics, biosimilars, combination products, and second-in-class branded drugs, which can be up to 80% cheaper than brand-name alternatives. The Food and Drug Administration (FDA) is tasked with issuing a report within 180 days on how to streamline these approvals.
It also targets pharmacy benefit managers (PBMs), requiring improved disclosure of fees to reduce their influence as middlemen, which is seen as inflating costs. This aims to create a more transparent and competitive drug market.
Facilitating Drug Importation:
The executive order instructs HHS to streamline FDA processes for state-sponsored drug importation programs under Section 804 of the Food, Drug, and Cosmetic Act, particularly from Canada. This builds on a first-term initiative to allow states to import lower-cost drugs, with Florida being the only state to receive FDA approval so far (though not yet implemented). The goal is to save states millions on prescription drug costs.
Aligning Medicare Payments with Acquisition Costs:
The plan includes a directive for HHS to survey hospital outpatient department acquisition costs for drugs and propose adjustments to Medicare payment rates to align with actual acquisition costs. This addresses a previous issue from Trump’s first term where payment reductions for 340B hospitals were overturned due to procedural errors. For certain drugs, this could lower Medicare payments by up to 35%.
Providing Discounts for Low-Income Patients:
The plan resurrects a first-term program to provide low-cost insulin and epinephrine to low-income patients, including those without insurance. Examples include insulin at 3 cents per vial (plus a small administrative fee) and epinephrine auto-injectors at $15. This aims to deliver immediate relief for life-saving medications.
Standardizing Medicare Payments:
The plan seeks to standardize Medicare payments for certain drugs, such as cancer treatments, regardless of where they are administered (e.g., hospital vs. clinic), potentially reducing prices by up to 60%. This aims to eliminate pricing disparities based on care settings.
