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Trump Revokes Biden's Drug Price Policy: How Trump Could Change Healthcare?

Writer's picture: Michael HayesMichael Hayes

As President Donald Trump begins shaping his second-term health care agenda, a clear focus is emerging on dismantling policies from the Biden administration. Trump signed an executive order that rolled back efforts designed to reduce prescription drug costs for Medicare and Medicaid recipients, expand the Affordable Care Act (ACA), and bolster protections for Medicaid participants.


One of the Biden-era initiatives that Trump reversed involved a proposal to explore strategies for lowering prescription drug costs for Medicare, including a potential $2 monthly cap on certain generic medications. However, according to Stacie Dusetzina, PhD, a health policy professor at Vanderbilt University, this proposal was still in its early stages, and its implementation had been uncertain, as she discussed with NBC News.


While Trump’s executive orders have canceled certain initiatives, some of the Biden administration’s hallmark policies remain intact, such as the $35 monthly cap on insulin, the $2,000 annual out-of-pocket cap for prescription drugs, and Medicare’s authority to negotiate drug prices under the Inflation Reduction Act (IRA). However, Trump's actions may suggest that these established policies could face challenges or slow progress in his administration.


Changes to the Affordable Care Act (ACA)

Another area where Trump has taken action is with the ACA. He reversed an executive order that extended enrollment periods for ACA coverage in many states and provided additional funding to external organizations assisting with sign-ups. These measures helped increase ACA enrollment under Biden, reaching around 24 million people—mostly due to expanded government subsidies that lowered premiums. Trump’s actions have ended a 12-week extension for enrollment in 36 states, which was initially designed to give uninsured adults more time to secure coverage.


Drug Pricing Reforms Ended

Trump also moved to eliminate a set of experimental drug pricing reforms that were initiated under Biden’s administration. These reforms were meant to pilot new pricing models under the Center for Medicare and Medicaid Innovation (CMMI), and their future now seems uncertain.


One of the halted programs aimed to help state Medicaid programs manage the high cost of innovative cell and gene therapies. The initiative proposed creating agreements among states to purchase treatments more affordably and avoid paying for ineffective options. States had until February 28, 2025, to apply for participation.


Another model sought to reduce Medicare spending on drugs that received accelerated approval from the FDA, with the goal of encouraging pharmaceutical companies to complete necessary confirmatory trials in a timely manner.

A third pilot project proposed a standardized $2 co-pay for generic medications used to manage chronic conditions in Medicare prescription drug plans to improve adherence rates.


Abe Sutton, a former White House and HHS advisor, is expected to lead CMMI under Trump’s administration.


Shifting Priorities on Health Care Costs

Some of Trump’s policy changes reflect a shift in his health care priorities, according to Larry Levitt, executive vice president of health policy at KFF. By halting Biden’s initiative to explore new approaches to reducing out-of-pocket drug costs, Trump may be signaling less emphasis on tackling health care expenses in the U.S.


It remains unclear whether the Trump administration will continue supporting Medicare’s ability to negotiate drug prices. Just last week, Medicare unveiled the next group of medications to be considered for negotiation, including drugs like semaglutide (Ozempic and Wegovy).


Arthur Caplan, PhD, a professor of medical ethics at NYU Grossman School of Medicine, noted that Trump’s health care approach seems cautious, leaving many of Biden’s larger health care initiatives intact. While Trump has generally advocated for a limited government role in the market, Caplan suggests he may recognize the U.S.'s significantly higher health care costs compared to other nations and the potential need for some government intervention.


References

1. Lovelace B Jr. Trump reverses Biden policies on drug pricing and Obamacare. NBC. January 21, 2025. Accessed January 22, 2025. https://www.nbcnews.com/health/health-news/trump-reverses-biden-policies-drug-pricing-obamacare-rcna188555


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