Trump Issues Executive Order Targeting Prescription Drug Costs

On April 15, 2025, President Trump signed Executive Order 14273 directing several federal agencies to develop regulatory proposals or make recommendations aimed at reducing prescription drug costs across the U.S. healthcare system.

While the majority of the Order is focused on reducing the cost of Medicare prescription drug prices, the Order could impact the price of prescription drugs for employer-sponsored group health plans.

Key Aspects of the Executive Order

The Executive Order sets two primary deadlines for agency action—90 days and 180 days after issuance.

90 Days (by 14 July 2025)

Agencies must submit recommendations to the President on how to enhance the pharmaceutical supply chain to make it more competitive, efficient, transparent, and resilient—ultimately lowering drug prices for consumers.

180 Days (by 12 October 2025)

The Executive Order outlines several more specific agency actions:

Department of Labor (“DOL”): Must propose regulations to enhance fiduciary transparency within employer-sponsored group health plans—particularly concerning the direct and indirect compensation arrangements involving pharmacy benefit managers (“PBMs”).

Food and Drug Administration (“FDA”): Must provide administrative and legislative recommendations to:

• Accelerate the approval process for generics, biosimilars, and other drug classes, and
• Streamline the reclassification of certain prescription drugs to over-the-counter (“OTC”) status.

Multi-Agency Collaboration (HHS, DOJ, Commerce, FTC): These agencies are tasked with conducting joint public listening sessions and issuing a report with recommendations to combat anti-competitive practices by pharmaceutical manufacturers.

What This Means for Employer Plans

While no immediate compliance actions are required, the Executive Order puts employer health plans on notice.

Most notably, the DOL’s upcoming rulemaking on PBM compensation transparency could materially affect how plan sponsors and fiduciaries evaluate their pharmacy benefit arrangements. This builds on the recent regulatory trend toward enhanced fee disclosure, following the Consolidated Appropriations Act (“CAA”) of 2021 and related guidance.

If implemented, new rules could:

• Require more granular reporting of PBM compensation, rebates, and spread pricing,
• Impose heightened fiduciary responsibilities around vendor oversight,
• Trigger amendments to service agreements or changes in plan governance protocols.

Additionally, any FDA-led efforts that ease market entry for generics or reclassify drugs to OTC status could alter formularies and claims costs—especially for high-volume medications.

Employer Considerations

Although the Executive Order doesn’t create immediate legal obligations, employers should begin preparing by:

• Monitoring forthcoming proposals from the DOL and other agencies;
• Engaging with benefit consultants or legal counsel to review existing PBM contracts and disclosure practices;
• Considering what internal changes may be needed to meet potential new transparency or fiduciary The White House at evening time. Washington, United States of America.requirements.

Staying Informed

We will continue to track developments closely as the regulatory landscape evolves.

Please contact your Wisterm representative if you have questions about your current PBM arrangements or would like to schedule a review of your plan’s fiduciary processes.