U.S. drug prices would match those of similar developed nations
- President Trump plans to sign an executive order tying U.S. drug prices to those paid by other countries.
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The Most Favored Nation policy would mark a dramatic shift in how drug prices are set, potentially cutting costs and saving trillions.
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Pharmaceutical companies warn it could cost their industry over $1 trillion and reduce drug availability for low-income Americans.
President Trump on Sunday pledged to dramatically lower prescription drug prices by signing a new executive order that would peg the cost of medications in the U.S. to what other countries pay a policy long championed by health advocates and criticized by the pharmaceutical industry.
Our Country will finally be treated fairly, Trump wrote on his social media platform, Truth Social. Healthcare Costs will be reduced by numbers never even thought of before... the United States will save TRILLIONS OF DOLLARS.
The executive order, expected Monday, would institute a Most Favored Nation policy, forcing drug manufacturers to charge the U.S. government no more than the lowest prices paid by other developed nations. Countries with single-payer systems such as Switzerland and Japan routinely negotiate significantly lower prices for the same drugs.
For example, the list price for Jardiance, a diabetes medication, was $611 per month in the U.S. last year, while it cost $70 in Switzerland and just $35 in Japan, according to the nonprofit health policy group KFF.
A battle with big pharma
Industry groups were quick to push back. Alex Schriver, senior vice president at the Pharmaceutical Research and Manufacturers of America (PhRMA), called the move government price setting and warned it would hurt American patients and innovation, according to a Wall Street Journal report.
Pharmaceutical executives estimate the proposed pricing model for Medicaid alone would cost the industry more than $1 trillion over 10 years and could prompt drugmakers to exit Medicaid, the government program for low-income Americans.
Despite lobbying efforts to prevent the policy, Trump signaled no intention to relent, suggesting the industrys campaign contributions had lost their influence.
Not with me, and not with the Republican Party, he wrote. We are going to do the right thing.
Previous attempts, legal hurdles
Trump previously attempted to implement a similar drug pricing rule during his first administration for Medicare Part B drugs. That effort was overturned by a court on procedural grounds and later dropped by the Biden administration.
This time, Trump is pushing for a broader application, though he hasnt clarified whether the new order would apply to Medicare, Medicaid, or all federal programs.
His announcement comes amid mounting public frustration over skyrocketing drug prices and a new wave of scrutiny as he campaigns for a return to the White House.
Posted: 2025-05-12 01:35:12
