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On the surface, President Donald Trump’s latest drug‑pricing order looks like a populist coup. The White House says it will “put American patients first once again,” capping insulin at three cents and promising deeper Medicare savings. Yet nested in the fine print is a directive for HHS to work with Congress to delay Medicare’s power to negotiate pill prices to 13 years post‑approval (up from nine). In the same week, the administration launched a Section 232 probe that could slap double‑digit tariffs on imported medicines. Together, those moves could ultimately lift branded‑drug margins even as today’s headlines tout relief at the pharmacy counter—and the tariff question adds yet another layer of complexity to the strategy.
How a 13‑year clock could reshape R&D economics
If enacted, the longer window would give small‑molecule developers four extra years of undiscounted revenue. As Biopharma Dive notes, the order only “directs Kennedy to work with Congress to ‘align’” timelines, but pharma leaders hope that means pushing pills to the 13‑year mark cited by Reuters. Industry group PhRMA has long argued the nine‑year window under the Inflation Reduction Act was too short to recoup R&D outlays, particularly in oral‑therapy hot spots like oncology and neurology. A 13‑year runway would extend peak pricing before Medicare discounts kick in, reshaping early‑stage investment math.
National‑security probe clouds the cost equation
The same order week brought a Section 232 “national‑security” investigation that could impose tariffs of 10–25 percent on APIs and finished drugs. Roughly three‑quarters of U.S. API facilities are overseas—China and India supply the lion’s share—so duties could raise costs for the very firms the order appears to help. (See FDA testimony on supply‑chain exposure here.) Commerce has 270 days to finish the probe, and analysts warn the levies could wipe out much of the order’s headline savings, according to Reuters.
Order also revives discounts and targets PBMs
Beyond the negotiation push, the order revives several Trump‑era initiatives and clamps down on intermediaries: It reinstates steep discounts on insulin (as low as $0.03 + a small fee) and injectable epinephrine ($15 + fee) for low‑income and uninsured patients via Federally Qualified Health Centers. In addition, it directs agencies to boost transparency in the drug value chain, potentially mandating point‑of‑sale rebate pass‑throughs and banning Medicaid spread pricing. Finally, it orders Medicare to adopt site‑neutral payments, reimbursing infused drugs like cancer therapies at the same rate whether delivered in a hospital outpatient department or a physician’s office.
“Transparency is coming for site‑of‑care reimbursement differences,” wrote Chris O’Dell, SVP of Market Solutions at Turquoise Health, adding that oncology mark‑ups will likely face heightened scrutiny.
Finally, the order asks the FDA to create an accelerated review pathway (dubbed “RapidPath”) for first generics and biosimilars and to fast‑track state drug‑importation plans—moves the administration says will widen competition and further pressure prices.
Filed Under: Regulatory affairs
