Medicare drug price caps remain in place despite Trump executive order | Fact check
The claim: Trump removed caps on prescription drug prices that Biden ordered
A Jan. 21 Facebook post (direct link, archive link) claims President Donald Trump's actions are increasing prescription drug costs.
“BREAKING -- Trump RAISES prescription drug costs by as much as 4200%,” reads a screenshot of a post on X from commentator Tristan Snell featured in the Facebook post. “He just reversed all the cost caps Biden negotiated for anyone on Medicare or Medicaid, over 120 MILLION Americans. He's pro Big Pharma -- and pro Big Insurance. He doesn't care about you. It was all LIES.”
The post was shared more than 1,000 times in six days.
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Our rating: False
Trump’s executive orders did not remove drug price caps put in place during Joe Biden’s presidency. There are caps contained in a federal law that cannot be overturned with an executive action.
No changes to existing price caps
Trump’s return to office began with a blitz of executive actions, many of which overturned policies and actions from the Biden administration.
But none of the actions affected drug price caps that were enacted under Biden, as the post claims. Caps on vaccines and insulin costs for Medicare recipients were instituted under the Inflation Reduction Act of 2022, a federal law approved by Congress. As such, it cannot be repealed with an executive order.
Trump did issue an order specifically repealing an October 2022 Biden executive order that had directed the secretary of health and human services to “consider whether” the Centers for Medicare and Medicaid Services Innovation Center should test “new health care payment and delivery models that would lower drug costs and promote access to innovative drug therapies for beneficiaries.”
Biden’s order resulted in proposals that included caps on multiple commonly used drugs for Medicare patients but they were not initiated during his term.
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It’s unclear what the claim of 4,200% increased drug costs comes from. Media reports before the Inflation Reduction Act price cap said out-of-pocket costs for insulin could cross $1,400 a month, roughly 4,000% of the $35 cap under the Inflation Reduction Act.
It is important to note that almost nobody should have been paying that much for insulin. Medicare Part D recipients paid an average of $54 per prescription according to a July 2022 Kaiser Family Foundation study, while a 2000 Rand study found the manufacturer price for insulin averaged just below $100. And after the Inflation Reduction Act went into effect, the largest insulin manufacturers voluntarily announced programs that brought the price down to $35 or less for most patients.
Those voluntary reductions are not affected by Trump’s order.
The Inflation Reduction Act also allows Medicare to negotiate drug prices, separate from the specific caps on insulin and certain vaccines, and the Biden administration announced lower prices on some drugs negotiated under that provision. Medicare patients won’t see the lower prices until 2026. The Trump administration appears poised to preserve those lower prices, defending the program in a Feb. 19 court filing.
Paste BN reached out to Snell and the Facebook user who shared the claim but did not immediately receive responses.
Our fact-check sources
- Library of Congress, Aug. 16, 2022, H.R.5376 - Inflation Reduction Act of 2022
- Paste BN, Jan. 3, 2024, Insulin $35 cap price now in effect, lowering costs for many Americans with diabetes
- Department of Health and Human Services, accessed Feb. 4, A Report in Response to the Executive Order on Lowering Prescription Drug Costs for Americans
- Department of Health and Human Services, Aug. 16, 2024, Commemorating the 2nd Anniversary of the Biden-Harris Lower Cost Prescription Drug Law
- Department of Health and Human Services, Jan. 17, HHS Announces 15 Additional Drugs Selected for Medicare Drug Price Negotiations in Continued Effort to Lower Prescription Drug Costs for Seniors
- The White House, Jan. 20, Initial Recissions of Harmful Executive Orders and Actions
- The White House, Oct. 14, 2022, Executive Order 14087—Lowering Prescription Drug Costs for Americans
- Kaiser Family Foundation, July 28, 2022, Insulin Out-of-Pocket Costs in Medicare Part D | KFF
- Rand Corp., Oct. 6, 2020, Insulin Prices Are Dramatically Higher in the United States Than in Other Countries
- Bloomberg Law, Feb. 20, Trump’s DOJ Defends Drug Price Program in Third Circuit Brief
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