Lowering Drug Prices by Putting America First
The order establishes a federal policy that Medicare must not pay more for high-cost Part B prescription drugs than the lowest price the same manufacturer charges any comparable developed nation — a benchmark called the 'most-favored-nation price.'
It directs the Secretary of Health and Human Services to immediately begin rulemaking to test a payment model enforcing this price cap, signaling a major shift in how the federal government approaches drug costs for Medicare beneficiaries.
What this order does
What it orders
The order directs the Secretary of Health and Human Services to immediately begin rulemaking steps to test a payment model under which Medicare would pay no more than the "most-favored-nation price" for certain high-cost prescription drugs and biological products covered by Medicare Part B. The most-favored-nation price is defined as the lowest price — adjusted for volume and national GDP differences — that a drug manufacturer charges any OECD member country with a comparable per-capita GDP. The model is designed to test whether capping prices at this level would reduce poor clinical outcomes and excessive spending tied to high drug costs.
The order does not itself change Medicare reimbursement rates or amend any statute; the actual price cap takes effect only after HHS completes the rulemaking and payment model implementation process the order sets in motion. Standard provisions clarify that the order creates no individually enforceable rights and must be implemented consistent with applicable law and available appropriations.
Who it affects
Medicare Part B beneficiaries — particularly seniors and people with disabilities — who currently pay cost-sharing on high-cost prescription drugs and biological products. Pharmaceutical manufacturers whose U.S. Medicare pricing exceeds what they charge comparable developed nations would face pressure to lower U.S. prices under the eventual model.
Why it matters
If the rulemaking and payment model move forward, Medicare would pay significantly less for certain high-cost Part B drugs, reducing out-of-pocket costs for beneficiaries who share in those payments. Drug manufacturers that charge the U.S. more than other developed nations would face a binding price ceiling on Medicare sales.
What must happen and when
How the order is supposed to work
The order requires HHS to act "immediately" but the operative mechanism is rulemaking — a multi-step administrative process that includes a proposed rule, public comment period, and final rule before prices are affected. The payment model is structured as a test, meaning not all Medicare Part B drugs would be covered at the outset. No enforcement deadline is specified, and the order's standard severability and appropriations-availability clauses mean Congress can limit implementation through funding restrictions.
Actions and deadlines
- Implement rulemaking plan to test a most-favored-nation payment model for high-cost Medicare Part B drugs