Trump to sign order to cut prices of medicines
Donald Trump said he would sign an order to cut prescription prices to the levels paid by other nations.
An executive order to be signed by President Donald Trump on Monday, May 12, will direct his government to take actions against “discriminatory” policies in foreign countries that suppress drug prices abroad, a White House official said.
The order is expected to tell the U.S. Department of Health and Human Services to adopt the policy, which would set prescription drug prices to match those of comparable countries.
“DRUG PRICES TO BE CUT BY 59%,” he said in a Truth Social post on May 12, reviving a plan from his first term. The day before, in another post, he’d said the prices would “be REDUCED, almost immediately, by 30% to 80%.”
The United States Trade Representative and the Department of Commerce will be directed to take action against “unreasonable and discriminatory policies in foreign countries that suppress drug prices abroad,” a White House official said in background call with reporters.
What will Trump drug price executive order say?
The Secretary of Health and Human Services Robert F. Kennedy Jr. will set targets for price reductions across all markets in the U.S. within 30 days, the official said.
If adequate progress is not made toward the price reduction targets, the health secretary will impose most favored nation pricing via rulemaking, according to the official.
During his first term, Trump in 2020 pushed a “most favored nation” rule that would have applied to Medicare payments but was later rescinded by the Biden administration.
Critics of the “most favored nation” concept argue that drug companies could game the system by securing deals with foreign governments for rebates to maintain current drug pricing in the U.S. Others say it could stifle innovation in medicine if the pharmaceutical industry loses profits.
How do U.S. drug prices compare to other countries?
Drug prices in the U.S. are nearly three times higher than 33 comparison countries, according to a 2024 report from the Health and Human Services department. About 67 million Americans are enrolled in Medicare.
Tying Medicare drug prices to international prices is a sharply different approach than how the Biden administration attempted to lower Medicare drug prices.
Under Biden’s 2022 climate and health legislation, the Inflation Reduction Act, Medicare was empowered to negotiate prices with pharmaceutical companies on a limited number of medications.
The Biden administration already negotiated lower prices on 10 widely prescribed drugs such as Xarelto or Eliquis, which will take effect in 2026. In January, Medicare announced another batch of 15 drugs subject to negotiation this year. Those drugs included blockbuster diabetes and weight loss drugs Ozempic and Wegovy, a cost-saving move that would take effect in 2027.
Asked how Trump’s plan affects Biden’s Inflation Reduction Act and drug price negotiations, the White House official said that after the first round of drug price negotiations, prices still ended up “in many cases, over 200% higher than what many foreign countries get,” adding that they viewed that as inadequate and that the Trump administration is taking action to go beyond what was achieved under the Inflation Reduction Act.
Contributing: Joey Garrison, USA TODAY; Reuters