President Donald Trump is set to announce a new plan to reduce U.S. prescription drug costs by linking government payments for certain medications to prices in other wealthy countries. This initiative, expected to be formalized through an executive order next week, aims to implement a “most favored nation” pricing model for Medicare, ensuring that the U.S. pays no more than the lowest prices found abroad.
This proposal comes in response to the significantly higher prescription drug prices in the U.S., which can be up to ten times more costly than in similar nations. Trump’s previous attempt to introduce this pricing model in 2020 was halted by a federal judge, following a lawsuit from the pharmaceutical industry, despite estimations that it could save taxpayers over $85 billion over seven years.
While the plan may focus on Medicare Part B drugs, which include treatments administered in healthcare facilities, details remain unfinalized. Health experts back the approach, arguing that drug companies should align their prices with international standards to alleviate inflation related to rising drug costs. However, concerns are raised about potential resistance from the pharmaceutical sector, which previously opposed similar measures.
Public sentiment appears supportive—over 75% of Americans consider medication costs unaffordable. Nonetheless, the industry argues that efforts should concentrate on pharmacy benefit managers (PBMs), who negotiate drug prices. Experts emphasize the importance of coordinated action, suggesting that both the executive order and price negotiations authorized by the Biden administration could tackle disparities in drug pricing effectively.
In summary, Trump’s proposed executive order reflects ongoing efforts to address high drug costs, though its outcome and potential industry pushback remain uncertain.
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