President Trump announced on Sunday that he is planning to sign an executive order that would base U.S. drug prices on the prices paid by other countries, which are typically much lower than what Americans pay. This move is in line with Trump’s previous attempts to implement a “most-favored nation” policy during his first administration.
In a post on Truth Social, Trump stated that the U.S. would pay the same price for drugs as the nation that pays the lowest price in the world. He claimed that this policy would lead to a significant decrease in drug prices, ranging from 30% to 80%, and would save trillions of dollars for the country. Trump described the executive order as one of the most consequential in the country’s history.
However, the implementation of this policy is expected to face legal challenges from the pharmaceutical industry. When a similar policy was proposed in Trump’s first term, it was blocked by the courts. Despite this, Trump’s supporters believe that he can avoid a similar defeat this time by adhering more closely to policymaking rules for the executive branch.
The pharmaceutical industry lobby group PhRMA has already criticized the planned executive order, calling it a “bad deal for American patients.” The group expressed concerns that lower prices mandated by the order may not necessarily improve patients’ access to medication.
Key details about Trump’s order, such as the legal mechanism to be used, remain unknown. The administration could potentially create a pilot program through the Center for Medicare & Medicaid Innovation or utilize President Biden’s drug-pricing law, which allows Medicare to negotiate prices for high-cost drugs.
Initially, the White House attempted to include a similar policy in a legislative package on Capitol Hill, but faced opposition from some Republicans. Despite pushback from the industry and his own party, Trump remains committed to the policy, emphasizing in his post that he is determined to do what he believes is the right thing for the American people. He asserted that his decision is not influenced by political contributions and is in line with the goals that Democrats have advocated for years.
