President Donald Trump has been busy rescinding Biden-era Executive Orders in his first days in office, including one that had the potential to lower the cost of prescription drugs for Americans on Medicare.
Known as Executive Order 14087, it was designed to identify a list of prescription drugs that would, under the plan, require only a $2 copay a month for anyone on Medicare. Former President Biden had directed the Center for Medicare and Medicaid Innovation, an arm of the Centers for Medicare and Medicaid Services, to look into ways to make prescription drugs cheaper for Medicare recipients.
“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 at the time. “Nearly 3 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.”
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Lowering drugs costs for Medicare enrollees
Drugs that were identified to be included on the Medicare $2 Drug List Model included ones to treat diabetes, high cholesterol and thyroid issues. The model aimed to “standardize cost sharing for low-cost generics through a new, easy-to-understand option for people with Medicare Part D enrolled in a participating plan and their health care providers,” wrote CMS when originally announcing the plan.
Other parts of the executive order included improving access to cell and gene therapies, which have high costs associated with them, and accelerating the evidence-gathering process for new drugs. Trump’s new executive order would take those mandates away from CMS.
More Medicare changes in the works?
In rescinding Biden’s executive order on prescription drugs and many others, Trump said, “The previous administration has embedded deeply unpopular, inflationary, illegal, and radical practices within every agency and office of the Federal Government.” He warned, “The revocations within this order will be the first of many steps the United States Federal Government will take to repair our institutions and our economy.” Other Medicare and Medicaid existing laws and regulations around prescription drugs remain in effect for now.
It's unclear what Trump will do about Medicare's ability to negotiate lower drug prices under the Inflation Reduction Act, put on the books in 2022. The Act allows Medicare to negotiate drug prices directly with pharmaceutical companies for the first time. President Trump hasn’t said if he supports the government’s ability to negotiate with the drug companies directly.
In the first round, Medicare negotiated lower prices for ten drugs. Last week, Medicare announced that it planned to negotiate prices for another 15 medications, including the popular weight-loss drugs Ozempic and Wegovy. The high costs associated with these drugs, which have proven effective, have been fiercely criticized by consumers.
Related content
-
Buying an Annuity? Avoid These Five Common MistakesAnnuities are becoming more popular but if you choose the wrong one it could create a liquidity problem.
-
How to Opt Out of Uber’s New 1.5% Currency Conversion FeePaying for rides in your preferred currency? Uber will now charge a 1.5% fee for that, unless you disable the feature in the app.
-
Five Annuity Mistakes to Avoid
Annuities are becoming more popular but if you choose the wrong one it could create a liquidity problem.
-
Five Wins for Federal Employees in the Social Security Fairness ActMore money means more opportunities and financial stability for current retirees and future retirees.
-
This Boring Retirement Income Source Has Big Tax BenefitsDon't ignore this retirement income source, especially if you are wealthy or need portfolio diversification.
-
Three Reasons to Skip the 401(k) Super Catch-UpOlder workers may want to forgo the 401(k) super catch-up and put their money to work elsewhere.
-
Three Ways to Get Your Finances in Better ShapeWant fitter finances this year and beyond? Start by making full use of all your workplace benefits — from 401(k)s to budgeting apps and wellness programs.
-
Want to Retire With $100K a Year? Here's How Much to SaveWhat "magic number" will be enough to generate $100K a year in retirement income? We do the math for you.
-
Rethinking Income When You Retire: No Paycheck, No ProblemWhen you retire, you'll need to adjust to the reality of depending on assets instead of a regular paycheck. For that, you'll need a new financial strategy.
-
How to Support Your Parents Without Derailing Your FinancesPutting your aging parents' financial house in order can give you a clearer picture of where they need support and how to balance that with your own plans.
