Donald Trump's Medicare Executive Order Explained

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President Donald Trump has repealed former President Joe Biden's Executive Order 14087, which aimed to reduce the cost of prescription drugs for Americans.

Newsweek reached out to the Trump transition team outside of normal business hours via email for comment.

Why it matters

Trump signed a series of executive orders and took a number of other presidential actions on Inauguration Day Monday, as he followed through on his campaign promise to enact a broad conservative agenda upon his return to the White House.

President Donald Trump signs an executive order in the Oval Office of the White House in Washington, DC, January 20, 2025. President Donald Trump signs an executive order in the Oval Office of the White House in Washington, DC, January 20, 2025. 2025. JIM WATSON/POOL/AFP via Getty Images/Getty Images What you need to know

Key elements of Executive Order 14087 implemented by Biden include:

$2 Medicare Formulary Model: This initiative aimed to cap the price of certain generic drugs at $2 for Medicare beneficiaries, thereby improving affordability. Cell and Gene Therapy Access Model: Designed to improve access to high-cost therapies for Medicaid beneficiaries, this model aimed to negotiate prices. and facilitate coverage. Clinical Evidence Acceleration Model: Focused on accelerating the availability of effective treatments by streamlining the process of gathering evidence for new medicines.

In the executive order, signed in 2022 by Biden, the then-president said: “Too many Americans face difficulty paying for their prescription drugs. On average, Americans pay two to three times more than people in other countries for prescription drugs, and one in four Americans who take prescription drugs have trouble paying for their medications. Nearly three in 10 American adults who take prescription medications report skipping doses, cutting their pills in half or not filling their prescriptions because of cost.

The potential impact of rescinding Executive Order 14087 is as follows:

Halting Development of Cost Reduction Models: The directive that the Department of Health and Human Services develop and test new models to reduce drug costs through the Center for Medicare and Medicaid Innovation has been withdrawn . The move could slow or stop progress on initiatives designed to make prescription drugs more affordable. Potential increase in out-of-pocket costs: Without the implementation of new models focused on cost reduction, Medicare and Medicaid beneficiaries could continue to face elevated hardship. – out-of-pocket expenses for prescription drugs, which could affect access to certain medications. Uncertainty in future drug pricing policies: The rescission creates uncertainty about the federal government's approach to reducing prescription drug costs, which could leave beneficiaries uncertain about future steps to control or reduce expenses. What people say

President Donald Trump, in the executive order, said: “The previous administration embedded deeply unpopular, inflationary, illegal and sweeping practices within every agency and office of the federal government. He added: “The revocations under this order will be the first of many steps the U.S. federal government will take to repair our institutions and our economy.”

In response to Trump's rescinding of the executive order, Democratic National Committee Rapid Response Director Alex Floyd issued the following statement: “Donald Trump is already carrying out his dangerous plans to raise drug prices to appease his billionaire supporters after Biden's election. -The Harris administration took on big pharma and won. Trump proves once again that he lied to the American people and that he doesn't care about cutting costs, only what's best for him and his ultra-rich friends.

What happens next

Although the Executive Order has been repealed, existing laws and regulations governing prescription drug pricing and Medicare and Medicaid policies remain in effect. However, measures taken by the previous administration, which they said were aimed at cutting costs, have now been halted.

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