President Donald Trump announced Sunday that he would be signing an executive order to cut prescription prices “almost immediately, by 30% to 80%.”
The vehicle for these price reductions will be a new “MOST FAVORED NATION’S POLICY” mandating that the U.S. pays the same price for drugs as whichever country pays the lowest price globally.
Trump has long discussed using an index of international drug prices — in countries such as Canada, Britain, and Japan — to set the price that Medicare would ultimately pay for drugs administered stateside by doctors. The plan, and related legislative initiatives, faced significant opposition by the pharmaceutical industry and its bipartisan allies in Congress.
After signing a slew of executive orders in 2020 aimed at controlling and lowering drug prices, Trump issued an order on Sept. 13, 2020, seeking to establish most favored nation pricing for Medicare drug payments and to ensure that “Americans [do] not bear extra burdens to compensate for the shortfalls that result from the nationalized public healthcare systems of wealthy countries abroad.”
The Centers for Medicare and Medicaid Services subsequently issued an interim final rule implementing the executive order, which multiple pharmaceutical industry trade groups sued to kill.
Not long after courts blocked the most favored nation rule, the Biden administration rescinded it.
Trump evidently figures he has a better shot this time around, even though many of the price reduction plan’s opponents are still in office.
‘We are going to do the right thing, something that the Democrats have fought for many years.’
“For many years the World has wondered why Prescription Drugs and Pharmaceuticals in the United States of America were SO MUCH HIGHER IN PRICE THAN THEY WERE IN ANY OTHER NATION, SOMETIMES BEING FIVE TO TEN TIMES MORE EXPENSIVE THAN THE SAME DRUG, MANUFACTURED IN THE EXACT SAME LABORATORY OR PLANT, BY THE SAME COMPANY?” the president wrote on Truth Social. “It was always difficult to explain and very embarrassing because, in fact, there was no correct or rightful answer.”
According to recent analysis conducted by RAND Health Care on behalf of the Department of Health and Human Services, U.S. drug prices for both brands and generics were nearly 2.78 times as high as prices in comparison countries. Even after adjustments for American rebates, U.S. prices for brand drugs were apparently at least 3.22 times as high as in other countries.
“The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, ALONE,” continued Trump. “Campaign Contributions can do wonders, but not with me, and not with the Republican Party. We are going to do the right thing, something that the Democrats have fought for many years.”
‘It jeopardizes the hundreds of billions our member companies are planning to invest in America.’
Trump noted that while relative costs will come down for American buyers, they will “rise throughout the World in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA!”
Big Pharma lobbyists began complaining in advance of Trump signing the executive order, which the president indicated last week would be “one of the most important announcements that have been made in many years about a certain subject.”
“This Foreign First Pricing scheme is a bad deal for American patients. Importing foreign prices will cut billions of dollars from Medicare with no guarantee that it helps patients or improves their access to medicines,” Stephen Ubl, the CEO of the lobbying group Pharmaceutical Research and Manufacturers of America, said in a statement obtained by The Hill.
“It jeopardizes the hundreds of billions our member companies are planning to invest in America, making us more reliant on China for innovative medicines,” added Ubl.
Trump has already taken action on the drug pricing front this year, directing his administration in February to increase enforcement of drug price transparency requirements and to promote “universal access to clear and accurate healthcare prices.”
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