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Executive Action Aims to Slash Drug Prices and Enhance PBM Clarity

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1.5 minute read

On April 15, 2025, President Donald Trump issued an executive order (EO) to reduce prescription drug prices in the U.S. This order instructs the Department of Labor (DOL) to enhance transparency in employer health plans regarding compensation from pharmacy benefit managers (PBM). While these changes will take time to implement, immediate cost reductions are not expected.

 

PBM Transparency

The Employer Retirement Income Security Act (ERISA) mandates strict standards for fiduciaries managing employee benefit plans, requiring careful selection and monitoring of third-party providers like PBMs. Recently, the PBM industry faces increased scrutiny over drug costs, transparency issues, and lawsuits alleging mismanagement of prescription benefits.

 

Despite more state regulations on PBMs, federal oversight remains limited. A White House fact sheet states that the EO aims to boost transparency by requiring PBMs to disclose fees paid to brokers. The DOL is tasked with proposing these regulations by mid-October 2025.

 

Other Reforms

Trump’s EO aims to cut drug prices and reduce Medicare costs, directing the U.S. Department of Health and Human Services to:

  • Enhance the Medicare Price Negotiation Program transparency, focus on high-cost drugs, and protect pharmaceutical innovation in the U.S.;
  • Offer strategies to stabilize and lower Medicare Part D premiums;
  • Ensure affordable access to insulin and injectable epinephrine for low-income individuals;
  • Offer suggestions to speed up the approval of generics, biosimilars, combination products, and second-in-class brand medications, and streamline the reclassification of prescription drugs to over-the-counter status;
  • Enhance the prescription drug importation program; and
  • Suggest strategies to curb anticompetitive practices by pharmaceutical manufacturers.

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National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Scott Fritz

Scott Fritz

Scott Fritz always has a willingness to help others, which has made him an ideal candidate for working in the public sector benefits arena throughout his career. He’s a team player and enjoys strategizing, problem solving, and finding effective cost-saving solutions for his clients. As an Employee Benefits Consultant, Scott is responsible for the overall assessment and management of an employer’s benefit plans. He is a licensed insurance agent and works with public sector organizations in Michigan and North Carolina.