President Donald Trump made a lengthy post on Truth Social on May 11, accusing American Pharmaceutical companies of overcharging consumers. He claimed that these companies have been using “Research and Development Costs” as an excuse for their high prices. Trump announced that he would be signing an Executive Order the following day that would aim to reduce prescription drug prices by 30% to 80%, potentially saving trillions of dollars for the U.S.
On May 12, Trump signed the executive order, setting a 30-day deadline for pharmaceutical companies to lower their drug costs. However, the question remains: can this order really lead to an 80% reduction in drug prices? Mark Cuban believes it has a chance.
The Executive Order directs the Secretary of Health and Human Services to negotiate lower prices for drugs with pharmaceutical companies within the next 30 days. If negotiations are unsuccessful, HHS may have to set drug prices to match those in other countries where prices are significantly lower.
Despite the potential impact of the Executive Order, the specifics of how drug prices will be lowered remain unclear. Critics argue that the order relies on voluntary price reductions by manufacturers and may not lead to immediate changes in drug pricing. Pharmaceutical companies have also voiced concerns about the impact on innovation and investment in America.
While the Executive Order may have some impact on drug pricing in the long term, the extent of the reduction remains uncertain. It is yet to be seen how the administration plans to enforce lower drug prices and whether negotiations will yield the desired outcomes.
It appears far less likely that there will be an 80% drop. Editor’s note on political coverage: GOBankingRates is nonpartisan and aims to cover all economic aspects objectively, providing balanced reports on politically focused finance stories. For more information on this topic, visit GOBankingRates.com.
