Trump Issues Executive Order About PBM Compensation

In an effort to lower prescription drug prices, President Donald Trump signed an executive order on Wednesday, which includes measures to improve transparency into pharmacy benefit manager fee disclosures. 

The executive order requires Secretary of Labor Lori Chavez-DeRemer to propose regulations pursuant to section 408(b)(2)(B) of the Employee Retirement Income Security Act to “improve employer health plan fiduciary transparency into the direct and indirect compensation” received by PBMs. 

In addition, the order requires the Secretary of Health and Human Services to conduct joint public listening sessions with the “appropriate personnel” from the Department of Justice, the Department of Commerce and the Federal Trade Commission and issue a report with recommendations to reduce anti-competitive behavior from pharmaceutical manufacturers. 

The FTC has released two interim reports exposing the “opaque” practices of PBMs, arguing that the three largest PBMs now manage nearly 80% of all prescriptions filled in the U.S. The FTC also found that these PBMs are vertically integrated, serving as health plans and pharmacists, and play other roles in the drug supply chain as well.  

As a result, the FTC has argued that the big three PBMs—OptumRx (UnitedHealth Group), Caremark (CVS Health) and Express Scripts (Cigna Group)—wield “enormous power and influence” over patients’ access to drugs and the prices they pay. 

The FTC also filed an administrative lawsuit against the big three PBMs in September 2024. 

The executive order also directs the Department of Health and Human Services to propose guidance for the Medicare Drug Price Negotiation Program, created under the Biden administration, to increase transparency and prioritize high-cost medications.  

Trump issued several executive orders and directives during his first term to reduce prescription drug costs, but they largely did not result in making medications more affordable.