President Donald Trump signed a wide-ranging executive order Monday that gives pharmaceutical companies a month to lower prescription drug prices, setting a firm 30-day deadline.
According to a senior White House official who spoke with reporters in advance, the order instructs the Department of Health and Human Services, under the leadership of Robert F. Kennedy Jr., to negotiate reduced pricing with pharmaceutical companies. If these negotiations fail, a fallback regulation will go into effect linking U.S. drug costs to the lower rates paid in other developed nations.
Trump previewed the executive action in a post to social media the night before the signing, generating anticipation ahead of Monday’s official announcement.
“I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World,” the president posted, pledging to sign the order on Monday morning at the White House.
Each year, the federal government spends enormous sums on medications for programs like Medicare, which serves nearly 70 million seniors, covering everything from prescription drugs to transfusions and injections.
In response, the leading lobbying group for pharmaceutical manufacturers condemned the policy, arguing it would harm American patients. Drugmakers contend that reductions in their profits could hinder their ability to develop breakthrough therapies.
“Importing foreign prices will cut billions of dollars from Medicare with no guarantee that it helps patients or improves their access to medicines,” Stephen J. Ubl, CEO of PhRMA, said in a statement. “It jeopardizes the hundreds of billions our member companies are planning to invest in America, making us more reliant on China for innovative medicines.”
Trump’s strategy to base Medicare drug pricing on international comparisons has been discussed for years and was previously introduced during his first term. A prior executive order also aimed to reduce U.S. drug prices by aligning them with lower costs found overseas, specifically for drugs administered by physicians.
That earlier initiative faced legal setbacks, including a court ruling that blocked its implementation during President Joe Biden’s time in office. At the time, pharmaceutical companies warned that allowing international price comparisons would effectively let foreign governments dictate U.S. drug valuations.
Highlighting the financial benefits, Trump portrayed Monday’s order as a major win for taxpayers.
“Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before,” Trump posted on social media.
While Trump emphasized major savings, the Department of Health and Human Services has limited ability to regulate drug prices across the board. Its greatest leverage lies in government programs like Medicare and Medicaid, which collectively serve around 150 million Americans. The agency has far less sway over pricing for those covered by private insurers.
Still, Trump made bold claims about the financial impact of his plan, declaring in his post that it would save “TRILLIONS OF DOLLARS.”
The order also directs the Department of Justice and the Federal Trade Commission to explore possible legal actions related to pricing strategies in the pharmaceutical industry.
American consumers consistently face higher drug costs than those in other affluent nations, a long-standing issue that has sparked bipartisan frustration. Despite repeated calls for reform, Congress has yet to pass meaningful legislation to address the disparity.
When he first ran for president, Trump sharply criticized pharmaceutical firms, accusing them of exploiting Americans while charging other countries less. He described their pricing practices as predatory.
Revisiting that criticism on Sunday, Trump wrote: “The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, ALONE.”
He also blasted the industry’s political influence, noting that while contributions might sway others, he remained unfazed.
“Campaign contributions can do wonders, but not with me, and not with the Republican Party.”
“We are going to do the right thing,” he wrote.
{Matzav.com}
