Trump Reverses Biden's $2 Generic Drug Initiative for Medicare Patients

President Donald Trump has rolled back an executive order by the Biden administration aimed at reducing prescription drug prices, including a pilot program that would have made generic drugs available to Medicare patients for just $2 per prescription. This move signals a departure from the previous administration's approach to drug pricing and raises questions about future negotiations with pharmaceutical companies.

Biden's Executive Order and Proposed Program

In 2022, President Biden issued an executive order calling on federal healthcare regulators to create new payment models that would lower prescription costs. The proposed initiative would have allowed Medicare prescription drug plans to offer a standardized list of 101 generic drugs with a $2 co-pay. Health officials estimated that this program could save patients an average of $57 per year.

Trump's Decision and Its Impact

By rescinding Biden's executive order, Trump effectively ended the $2 generic drug program before it was implemented. This move may delay or abandon other proposals that the Center for Medicare and Medicaid Innovation (CMS) developed in response to Biden's order. However, Trump's decision is unlikely to have an immediate impact on seniors' wallets since the program was still in its planning stages.

Industry Reactions

Some healthcare experts have criticized Trump's move, seeing it as a step back in efforts to reduce drug spending. However, others argue that the $2 generic drug list would add bureaucracy without significant savings and that it was more a public relations gesture than a serious attempt to lower costs.

Policy Differences and Future Negotiations

Trump's decision reflects a different philosophy toward Medicare drug pricing compared to the Biden administration, with a preference for less government intervention. The White House has not provided comment on the matter, and it remains unclear how aggressively the Trump administration will approach Medicare's upcoming negotiations with pharmaceutical companies. These talks will involve the government negotiating prices for 15 new drugs, including Ozempic. The outcome of these negotiations will have a significant impact on the federal budget and Medicare patients' out-of-pocket costs.