Donald Trump has instructed his health department to collaborate with Congress on amending a law that permits Medicare to negotiate prescription drug prices, a change the pharmaceutical industry has long advocated for. Drug manufacturers are pushing for a four-year extension on the timeline for small molecule drugs to become eligible for price negotiations, aligning it with the 13-year wait for biotech drugs. This move is part of Trump’s broader executive order aimed at reducing healthcare costs and follows a national security report on the pharmaceutical industry by the Trump administration.

The ability of Medicare to directly negotiate prices on selected medicines was initially proposed in President Joe Biden’s Inflation Reduction Act. Drugmakers have raised concerns about Medicare’s negotiating powers potentially hindering innovation, especially regarding the eligibility timeline for negotiations. While Trump cannot implement this change through executive order due to legislative constraints, he has directed the Secretary of Health and Human Services to work with Congress on this issue.

The Trump administration plans to negotiate prices for a group of 15 medications, including high-cost drugs like Novo Nordisk’s Ozempic and Pfizer’s Ibrance. Additionally, Trump’s order aims to align Medicare drug payments with hospital rates, standardize patient payment rates across locations, encourage drug importation programs, and streamline approval processes for generic and biosimilar drugs. These proposed changes are expected to generate more savings than the previous negotiation efforts under the Biden administration.