WASHINGTON — In a move that could potentially reduce medication expenses, former President Donald Trump announced his intention to sign an executive order aimed at tying drug prices in the United States to those in other countries with lower costs. This initiative, slated for signing on Monday, revives a proposal from his previous term, an effort he has focused on since before his presidency.
The plan would instruct the Department of Health and Human Services to align what Medicare pays for drugs administered in doctors’ offices with the lowest prices paid by other economically advanced nations. “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,” Trump stated on his social media platform. He assured Americans that the measure would lead to significant reductions in healthcare costs, promising figures never previously contemplated.
This executive order is expected to impact certain Medicare-covered drugs, particularly those given as office-based treatments like cancer infusion therapies and other injectables. While exact savings remain uncertain, Trump’s mention of “TRILLIONS OF DOLLARS” may be an overstatement. Medicare, which insures approximately 70 million older Americans, has been at the center of bipartisan discontent over pharmaceutical pricing compared to other wealthy countries. Despite widespread frustration, a permanent legislative fix has remained elusive.
Under the prospective order, the federal payments to pharmaceutical companies for medication would reflect those paid by other advanced nations. Such a “most favored nation” approach, however, has faced staunch opposition from the pharmaceutical sector. Trump previously sought to enact a similar rule during his tenure but faced setbacks, including a block by a court under the subsequent administration.
Critics, including pharmaceutical companies, argue that this pricing approach could disadvantage the U.S., placing foreign governments in a pivotal role in determining drug values domestically. These companies warn that enforced price reductions might impair innovation by diminishing profits crucial for the development of new medications.
The scope of Trump’s plan would likely encompass medicines under Medicare Part B, which covers physician visits. While beneficiaries must bear some expenses, to date, traditional Medicare enrollees have had no annual cap on out-of-pocket pharmaceutical spending. A study from Trump’s first term highlighted that the U.S. expends twice the amount on these drugs compared to some other countries, with 2021 costing Part B more than $33 billion.
In contrast, more common prescriptions normally filled through pharmacies would theoretically be excluded from this order. Trump’s prior teasing of a “very big announcement” generated speculation, but he made clear that the order is unrelated to trade or existing tariffs. “We’re going to have a very, very big announcement to make — like as big as it gets,” he promised.
From the start of his presidency, Trump criticized pharmaceutical companies, accusing them of “getting away with murder” due to the stark difference between U.S. and foreign drug pricing, and outdated pricing models that seemed to exploit Americans. On Sunday, he reiterated this stance, alleging that companies misrepresent research and development costs and burden U.S. consumers unnecessarily.
He even took aim at their influential lobbying capabilities, claiming campaign contributions typically sway policy but vowed, “not with me, and not with the Republican Party.” Trump concluded his announcement by reinforcing his commitment to “do the right thing” in addressing the longstanding issue of drug pricing.