U.S. Takes Aim at Drug Prices With New Executive Order

In May, the President issued a sweeping new executive order aimed at reducing the cost of prescription drugs for Americans, —particularly for seniors enrolled in Medicare.

This move could have a direct impact on Medicare Part D enrollees, Medigap plan holders, and anyone concerned about out-of-pocket prescription drug expenses.

Something had to give, and soon. Here’s why:

Currently, Americans pay more than three times what they pay in other developed nations, often for prescription drugs that were developed right here in the United States.

Meanwhile, Americans comprise only about 5% of the world’s population. But we pay the overwhelming majority of drug development costs. We also fund more than 75% of the drug industry profits worldwide.

Why’s that? Because big drug companies are dropping their prices to foreigners, and subsidizing these discounts by charging Americans more.

Effectively, they’re ripping us off and passing the savings on to the other guy!

As a result, 1 in 5 seniors here in America report skipping taking their prescription medications due to cost.

Well, that’s not a very good deal for us. So this new executive order seeks to give Americans a fairer deal. This new executive order directs federal agencies to develop and implement policies that:

• Speed up approval of low-cost generic and biosimilar drugs,
• Expand our ability to import drugs from other countries from countries at lower costs,
• Cap the price Medicare pays at no more than the lowest price paid by other economically comparable countries.

Why Did Trump Issue The Order? 

This executive order seeks to stop Big Pharma’s price-gouging tactics, and rein in middlemen known as pharmacy benefit managers (PBMs). 

These PBMs often inflate drug prices without providing much of a direct benefit to consumers at all.

With this order, the government  seeks to create more transparency, and allow competitive pricing. Ultimately, the goal is to prevent U.S. seniors from paying significantly more than patients in other countries for the same drugs.

How Does This Affect Medicare Beneficiaries?

If fully implemented, the executive order would:

• Allow Americans to purchase drugs at the lower prices currently paid by other developed countries – a discount amounting to as much as 78%, according to a White House press release.
• Expand access to lower-cost generics, biosimilar drugs, and imports. 

However, as with many executive orders, the actual impact depends on how quickly and effectively federal agencies implement the directives, —and whether legal or political challenges delay their effects.

The order won’t change any prices by fiat; itbe changing any prices by fiat; It simply directs federal agencies to implement policies that may lead to more favorable pricing for Americans. 

What You Can Do Right Now to Reduce Your Drug and Plan Costs

While you wait for the executive order to have an effect on drug prices, here are six practical, actionable things you can do to lower your prescription drug costs in 2025 and beyond: 

1. Compare Part D Plans Every Year

Plan formularies, premiums, and copays change annually. During Open Enrollment (Oct. 15 – Dec. 7), 

Check to see if there’s a better option for your specific medications at Medicare.gov. Many seniors can save hundreds simply by switching to a lower-cost plan that covers their prescriptions more efficiently.

2. Ask Your Doctor About Generic Alternatives

Generic versions of many common medications are just as effective and far less expensive. In 2023, nearly 90% of prescriptions filled in the U.S. were generic.

3. Use Preferred Pharmacies or Mail Order

Your plan may offer deep discounts if you use a preferred network pharmacy or mail-order service. These options can dramatically reduce your copays, —especially for maintenance medications.

4. Apply for Extra Help

If your income and assets are limited, you may qualify for the Extra Help program, which lowers or eliminates premiums, deductibles, and copayments for Medicare Part D.

5. Review Your Medigap Plan

Not all Medigap plans are the same. If you’re paying too much, or your healthcare needs have changed, you may be eligible to switch plans, —sometimes without new underwriting. Plans G and N offer excellent value for many seniors.

6. Consider a Drug Discount Program

As a MediGap Advisors client, you also have access to a powerful discount program.

Additionally, some pharmacies and third-party programs like GoodRx or SingleCare offer discounts outside of Medicare. Sometimes, paying cash using one of these tools can be cheaper than using your Part D card.

As a MediGap Advisors client, you also have access to a powerful discount program.

Questions? 

The team at MediGap Advisors is here to help you navigate your Medicare coverage and find ways to lower your prescription costs. 

Contact your Personal Benefits Manager today for a free Medicare plan review. We’ll make sure you’re not paying more than you need to—whether it’s for your medications, Medigap plan, or Part D coverage.

Here’s to your health and wealth,

Wiley P. Long, III
President – MediGap Advisors

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