Trump Targets High US Drug Prices With Executive Order

President Donald Trump is set to take executive action targeting the persistently high cost of prescription medications in the United States, a move reflecting an ongoing push to alleviate financial burdens on American households and the healthcare system. This initiative signals a renewed effort to implement significant pricing reforms within the pharmaceutical sector.

New Executive Order on Drug Pricing

The core of the President’s plan involves an executive order, scheduled for signing on Monday morning. This order aims to establish a “most favored nation” pricing model for pharmaceuticals. Under this policy, the United States would seek to pay no more for specific drugs than the lowest price paid by any comparable developed nation worldwide.

Projected Cost Reductions

President Trump asserted that this policy could lead to unprecedented reductions in healthcare expenses, potentially slashing drug costs by 30% to 80%. He anticipates this could generate substantial savings for the government over time. The significant price differences driving this initiative are notable; for instance, certain medications reportedly carry a monthly cost in the U.S. that is multiple times higher than in other developed nations in Europe or Asia.

Pharmaceutical Sector Response

The pharmaceutical industry has strongly opposed the proposed measure. Industry trade group PhRMA characterized the executive order as detrimental “government price-fixing.” They warn that such a policy could stifle crucial medical innovation and ultimately harm patients. PhRMA further estimates that applying this model to programs like Medicaid could result in industry losses exceeding $1 trillion over a decade, potentially forcing some companies to exit the public coverage system.

Policy Context and Presidential Stance

It remains unclear whether the executive order’s scope will be limited to government programs like Medicare and Medicaid or if it will encompass the broader regulated pharmaceutical market. President Trump underscored his determination, indicating he would resist lobbying from the pharmaceutical sector. “We are going to do the right thing,” he stated, positioning his action as decisive compared to past discussions. This “most favored nation” approach revisits an idea from his administration’s earlier efforts, which faced legal obstacles and were later paused. The current initiative appears to be a more comprehensive attempt to implement the policy, framed within broader economic goals focused on protectionism and reduced government spending.