The order includes a suite of actions to reduce prices, standardize pricing, improve transparency, and reduce drug development costs.
President Donald Trump signed an executive order on April 15 that directs a wide range of actions to lower the cost of prescription medications, including through the importation of prescription drugs from Canada by the states.
States have been authorized since 2020 to import certain drugs from Canada—where they are often available at a lower price—under section 804 of the Food, Drug and Cosmetics Act. However, approval from the Food and Drug Administration is required, and that process is complex.
Florida is the only state now authorized to import drugs from Canada, and the approval process took more than three years.
Trump’s order instructs the Food and Drug Administration to improve the process and encourages states to apply for authorization to import medications.
An analysis by health research group KFF found that per-capita spending on prescriptions was 42 percent higher in the United States than in Canada.
Lowering Prices
Three items in the executive order aim at lowering the cost of drugs already available in the United States.
The first such action is to revisit the Medicare drug negotiation program, which was authorized by the Inflation Reduction Act.
This program allows Medicare to negotiate with drug companies to reduce the cost of brand-name drugs approved for Medicare Part B and Part D beneficiaries.
The initial round of lower prices involving 10 prescription medications will take effect on Jan. 1, 2026. A second round of 15 drugs will be available for Medicare beneficiaries at a reduced price in 2027.
A White House official told reporters that the Trump administration would improve the program and make it more transparent.
A second price-lowering action aims to make Medicare’s payment for prescription drugs commensurate with the supplier’s cost. Currently, Medicare pays as much as 35 percent over the actual cost of some medications.
A third provision for lowering prices directs that steps be taken to ensure that Medicare pays a comparable price for prescription drugs regardless of where they are dispensed.
Currently, Medicare may pay up to 60 percent more for a drug dispensed at an outpatient clinic than for the same medication dispensed at a doctor’s office, which creates an incentive for providers to drive traffic to the higher-paying location.
A fourth action item directs Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, to further reduce the price of insulin.
