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EO 13948Executive OrderTrump 45 · R Quiet signal

Executive Order 13948

Lowering Drug Prices by Putting America First

This executive order directs Medicare to pay no more than the lowest price drug manufacturers charge other wealthy developed nations for the same prescription drugs and biological products. It orders the Secretary of Health and Human Services to implement rulemaking plans to test payment models applying these 'most-favored-nation' prices in Medicare Part B (certain high-cost drugs) and Part D (drugs with insufficient competition).

Federal Register Open PDF 85 FR 59649

Impact dates

  1. HHS Secretary to immediately take steps to implement Part B rulemaking plan

  2. HHS Secretary to develop and implement Part D rulemaking plan

Key directives

  • HHS Secretary shall immediately take appropriate steps to implement rulemaking plan to test Part B payment model at most-favored-nation price for certain high-cost drugs and biological products
  • HHS Secretary shall take appropriate steps to develop and implement rulemaking plan for Part D payment model at most-favored-nation price where insufficient competition exists and prices exceed OECD comparable levels
  • Revocation of Executive Order of July 24, 2020 (Lowering Drug Prices by Putting America First)

Who is ordered

Timeline

Immediate

  • Revocation of prior July 24, 2020 EO on same topic
  • HHS Secretary directed to 'immediately' begin steps for Part B payment model

Near term (90d)

  • HHS to develop rulemaking plan for Part D payment model

Long term

  • Potential implementation of most-favored-nation pricing in Medicare if models proceed through rulemaking and testing phases

Risks & tensions

  • EO explicitly qualified by 'to the extent consistent with law' and 'subject to availability of appropriations,' creating legal and fiscal uncertainty
  • Most-favored-nation pricing definition requires complex GDP and volume adjustments that may be difficult to operationalize
  • Part D model limited to situations 'where insufficient competition exists' and 'to the extent feasible,' narrowing scope
  • Pharmaceutical industry likely to challenge through litigation; prior similar EO was revoked, suggesting implementation difficulties
  • No explicit enforcement mechanism or beneficiary right of action stated
  • Testing framework means actual price changes are experimental and time-limited, not immediate permanent reform
Executive Order 13948: Lowering Drug Prices by Putting America First · Executive Orders