WASHINGTON ― President Donald Trump has announced his intention to sign an executive order implementing a “most favored nation” policy for drug pricing. This initiative, a revival of a plan from his first term, is aimed at reducing prescription drug and pharmaceutical prices by 30% to 80% almost immediately. The order, scheduled to be signed at 9 a.m. ET on May 12, will direct the U.S. Department of Health and Human Services to adopt the policy, aligning prescription drug prices with those of comparable countries. Details of the order remain unclear, including the specific insurance programs and drugs affected.
The pharmaceutical industry has shown resistance to this move. Previously, Trump pursued a “most favored nation” rule in 2020 that would have impacted Medicare payments, but the Biden administration later rescinded it. Trump emphasized his commitment to fair treatment for the United States with the new policy, stating that healthcare costs for citizens will see unprecedented reductions.
Drug prices in the U.S. are significantly higher than in 33 comparison countries, as reported by the Health and Human Services department. Trump’s plan to address drug pricing was first reported by Politico, indicating a focus on certain drugs within the Medicare program. Critics of the “most favored nation” concept raise concerns about potential issues such as drug companies manipulating foreign deals to maintain current U.S. pricing and a possible negative impact on medical innovation due to reduced industry profits.
The pharmaceutical industry has expressed reservations about government price setting, highlighting concerns about its impact on American patients. Trump has teased this drug pricing announcement as a significant development before his upcoming trip to the Middle East. The executive order is expected to have broad implications beyond Medicare’s current pricing structure.
