By: HUB’s EB Compliance Team

Much has been made in recent months about the proliferation of Executive Orders released in the initial months of the current Trump Administration. There is typically a flurry of Executive Orders (“EOs”) at the beginning of every change in presidential administrations, especially when the party of the White House resident also changes.

While EOs often make sweeping statements, they generally have little immediate practical impact. They are important in directing the policy of the new presidential administration, but they rely heavily on the relevant federal agencies to implement those directives. Therefore, while EOs often make headlines, the real work and impact only begin after they are signed.

With that in mind, below is a brief discussion of two recent EOs with a focus on the expected impacts on employer-sponsored plans and the timeline for when the changes will go into effect. This is presented with the understanding that the only action item is to keep an eye on future rulemaking tied to any of the previously released EOs.

Lowering Drug Prices by Once Again Putting Americans First (April 15, 2025)

This EO was focused on making changes to the implementation of the Inflation Reduction Act in several ways. Many of the EO’s provisions focus on the Medicare program and its drug price negotiation provisions in an attempt to bring down drug costs for Medicare beneficiaries. The various action timelines range from 60 days after the EO was signed to up to 1 year after. While this is a laudable goal, any success in reducing Medicare costs will likely increase drug costs in the private employer plan market, as drug manufacturers look for ways to make up for the loss in revenue.

The one section with the most direct impact on employers is in Section 12 of the order. That section requires the Department of Labor to propose regulations within 180 days of the date of the order that would require pharmacy benefit managers (PBMs) to complete compensation disclosures. Under the Consolidated Appropriations Act, 2021, various service providers to group health plans are required to provide disclosures of their compensation (both direct and indirect) to plan fiduciaries. Because the 2021 CAA does not explicitly list PBMs as covered service providers that are required to disclose their direct and indirect compensation, PBMs have largely taken the position they are not required to disclose. These regulations, once finalized (and if they survive applicable legal challenges), would remove any ambiguity on the matter.

The remainder of the EO calls for various members of the administration to make legislative or other recommendations to the President, or to conduct listening sessions. While all of this may have some effects down the road, until legislation is actually enacted or regulations or other guidance are finalized, there is no effect on employers.

Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients (May 12, 2025)

Essentially, this EO directs various agencies to take actions to:

  • Ensure foreign countries are not taking actions that make US consumers pay more for pharmaceuticals.
  • Facilitate direct-to consumer purchasing programs by drug manufacturers.
  • Communicate price targets to drug manufactures and, if that’s not successful, among other actions:
    • propose rules that impose most-favored-nation pricing, and
    • potentially facilitate importation of drugs from overseas by States or Indian Tribes, but not employers.

Additional Limitations

Notably, all of these directives (as with every EO) are limited by what applicable law allows. They are also subject to the availability of appropriations by Congress. In other words, regardless of what the EO says, if the law does not provide the authority for the action to be taken, or if there is no funding for it, then the action cannot be taken. Additionally, once rules are proposed in connection with the final legislation, they are often challenged through litigation, which can further delay (or in some cases, eliminate) their application.

Conclusion

While the EOs often receive significant news coverage, the real effect is not known until the relevant agencies take the requisite actions. HUB will monitor for rules to be released and will provide updates when employers have actions they can take in response.

If you have any questions, please contact your HUB Advisor. View more compliance articles in our Compliance Directory.

NOTICE OF DISCLAIMER

Neither Hub International Limited nor any of its affiliated companies is a law or accounting firm, and therefore they cannot provide legal or tax advice. The information herein is provided for general information only and is not intended to constitute legal or tax advice as to an organization’s or individual's specific circumstances. It is based on Hub International's understanding of the law as it exists on the date of this publication. Subsequent developments may result in this information becoming outdated or incorrect and Hub International does not have an obligation to update this information. You should consult an attorney, accountant, or other legal or tax professional regarding the application of the general information provided here to your organization’s specific situation in light of your or your organization’s particular needs.