Executive Order Targets Prescription Drug Costs and PBM Transparency

On April 15, 2025, President Donald Trump signed an executive order aimed at curbing prescription drug prices in the U.S. The order directs multiple federal agencies to take steps toward increasing transparency and accountability in the pharmaceutical supply chain, focusing on the role of pharmacy benefit managers (PBMs). Among the key directives is an order for the U.S. Department of Labor (DOL) to develop regulations that improve transparency around the compensation PBMs receive, directly and indirectly. While these changes are expected to be significant, the timeline for implementation means patients may not see immediate cost savings.

Increased Oversight of PBMs

Under the Employee Retirement Income Security Act (ERISA), employers who manage health plans are considered fiduciaries and are required to act in the best interest of plan participants. This includes the duty to select and monitor service providers, such as PBMs, carefully. In recent years, PBMs have been scrutinized for their opaque pricing structures and the perceived impact on prescription drug costs. Several lawsuits have also highlighted concerns about potential mismanagement of prescription benefits.

Although several states have passed laws regulating PBMs, federal oversight remains limited. According to the White House, this executive action will help close that gap by requiring greater disclosure of PBMs’ payments to brokers to steer business their way. The DOL has been instructed to publish a proposed rule within 180 days, by mid-October 2025.

Additional Policy Measures in the Executive Order

Beyond PBM regulation, the executive order sets out a broader strategy to lower drug prices and reduce costs under Medicare. Specific actions directed to the U.S. Department of Health and Human Services (HHS) include:

• Proposing guidance to increase transparency within the Medicare Drug Price Negotiation Program, with an emphasis on high-cost medications;
• Offering strategies to stabilize and reduce Medicare Part D premiums;
• Ensuring affordable access to insulin and injectable epinephrine for low-income individuals;
• Recommending ways to speed up approval for generic drugs, biosimilars, and certain brand-name medications;
• Improving the drug importation process to allow for more affordable alternatives;
• Suggesting methods to curb anti-competitive practices among pharmaceutical companies.