President Trump signs an executive order allowing states to import cheaper drugs from Canada, potentially saving Americans billions on prescription medications while reshaping the pharmaceutical landscape.
Key Takeaways
- President Trump signed an executive order on April 15, 2025, to lower prescription drug prices through Canadian imports and improved Medicare negotiations.
- The order expedites FDA approval for state importation programs, with Florida currently the only authorized state after a three-year process.
- Medicare’s drug payment structure will be revised to align with actual acquisition costs, eliminating current overpayments.
- Low-income patients could receive insulin for as little as 3 cents per vial under the new directive given to Dr. Mehmet Oz.
- The order includes measures to streamline approval for generic and biosimilar medications, potentially reducing prices by up to 80%.
Expanding Medication Import Programs
President Trump’s April 15 executive order authorizes states to import lower-cost prescription medications from Canada, a move that could significantly reduce healthcare costs for millions of Americans. Since 2020, states have been legally permitted to import certain medications from Canada under section 804 of the Food, Drug and Cosmetics Act, but the process has been hampered by lengthy FDA approval requirements. Florida remains the only state with current authorization after navigating a three-year approval process. This new order explicitly directs the FDA to improve and accelerate the approval framework.
According to analysis by the Kaiser Family Foundation, American per-capita spending on prescriptions is 42% higher than in Canada, highlighting the potential for substantial consumer savings. The executive order takes aim at this disparity by encouraging more states to apply for importation authorization and instructing federal agencies to facilitate approvals. This represents a significant step toward President Trump’s campaign promise to reduce medication costs for American families struggling with high prescription prices.
🚨 NEW: President Donald J. Trump just signed an Executive Order to expand on the historic efforts of his first term to lower prescription drug prices.
The Order directs the Department of Health and Human Services to take steps to significantly reduce drug prices for American…
— Rapid Response 47 (@RapidResponse47) April 15, 2025
Reforming Medicare Drug Pricing
A key component of the order focuses on enhancing the Medicare Drug Pricing Negotiation Program to secure better deals for seniors and taxpayers. The initiative revisits the negotiation framework with a target of implementing lower prices for an initial set of 10 medications starting January 1, 2026. Additionally, the order directs realignment of Medicare payments with the actual costs suppliers pay for medications, addressing a longstanding issue where Medicare has significantly overpaid for many prescription drugs compared to their acquisition costs.
“Today, President Donald J. Trump signed an Executive Order to expand on the historic efforts of his first term to lower prescription drug prices,” The White House wrote.
The order specifically calls for substantial discounts on life-saving medications such as insulin and injectable epinephrine for low-income patients. Dr. Mehmet Oz has been directed to develop strategies to further reduce insulin prices, with preliminary plans suggesting that qualified low-income and uninsured patients could receive insulin for as little as 3 cents per vial. This represents a dramatic improvement in accessibility for a medication that millions of Americans depend on daily.
Increasing Market Competition and Transparency
The executive order takes aim at systemic issues in the pharmaceutical industry by streamlining FDA approval processes for generic and biosimilar medications. These alternatives typically cost 80% less than brand-name drugs but face numerous barriers to market entry. By accelerating approvals, the administration aims to introduce more competitive options to counterbalance expensive name-brand medications. Health and Human Services Secretary Robert F. Kennedy Jr. has been instructed to work with Congress on addressing pharmaceutical research practices that favor expensive large-molecule drugs over more affordable alternatives.
“We don’t make our own drugs anymore,” Mr. Trump said. “The drug companies are in Ireland, and they’re in lots of other places, China.”
The order also addresses transparency issues in the prescription drug supply chain by directing the Department of Labor to establish rules requiring disclosure of broker fees and relationships. This measure targets potential conflicts of interest among pharmacy benefit managers and other intermediaries that may inflate consumer costs. The comprehensive approach reflects the administration’s stated commitment to creating a more transparent, competitive, and fair prescription drug market that prioritizes American patients over industry profits.
Sources:
- Trump’s Tariff Threat for Drug imports Poses Big Political Risks – The New York Times
- Trump signs healthcare executive order that includes a win for pharma companies | Reuters
- Fact Sheet: President Donald J. Trump Announces Actions to Lower Prescription Drug Prices
