Trump’s New Executive Order Delivers a Win for Big Pharma
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May 08, 2025
With a new executive order on prescription drug prices, President Donald Trump directed HHS to extend the period in which new-to-market small molecule drugs are exempt from Medicare price negotiation, a policy change that pharmaceutical companies have long supported.
The Medicare Drug Price Negotiation Program, which is part of the Inflation Reduction Act, allows the federal government to negotiate the prices of select drugs if they are brand-name medications or biological products without generic or biosimilar equivalents. Drugs subject to negotiation also must have been on the market seven years (for small molecule drugs) or 11 years (for biologics) after FDA approval.
But under the new executive order, HHS is directed to work with Congress to modify the program to “align the treatment of small molecule prescription drugs with that of biological products,” giving small molecule drugs an extra four years before they’re eligible to be selected for the negotiation program.
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