Executive Order Targets Lowering Drug Prices

On April 15, 2025, President Trump signed the Executive Order titled “Lowering Drug Prices by Once Again Putting Americans First,” aiming to reduce prescription drug costs and reform Medicare payment structures. This Order has several implications for physicians. 

First, Section 5 of the Executive Order directs the Secretary of the Department of Health and Human Services to survey hospital acquisition costs for outpatient drugs and propose appropriate adjustments to Medicare payments. This initiative aims to align Medicare reimbursements more closely with actual drug acquisition costs, consistent with the 340B program and budget neutrality standards. The initiative could impact Medicare reimbursement to physicians who administer drugs in outpatient settings.

Second, Section 11 of the Order requires the Secretary to ensure that Medicare payment methodologies do not encourage a shift in drug administration volume away from less costly physician office settings to more expensive settings such as hospital outpatient departments. This site-neutral payment approach could level the playing field concerning reimbursement for similar drug administration services, and potentially influence decisions to choose free-standing locations for these services. 

Lastly, Section 7 of the Executive Order applies specifically to Federally Qualified Health Centers (FQHCs) and requires FQHCs to provide insulin and injectable epinephrine to certain low-income individuals “at or below the discounted” acquisition costs paid by the FQHC. The FQHC will be permitted to charge a “minimal administration fee.”