Trump's Bold Move: Executive Order to Slash U.S. Drug Prices
Published Date: 12th May, 2025
In a significant policy shift, President Donald Trump announced plans on May 12, 2025, to sign an executive order aimed at drastically reducing prescription drug prices in the United States. The order, set to be signed on May 12, would implement a "Most Favored Nation" (MFN) pricing model, aligning U.S. drug costs with the lowest prices paid by other countries. Trump claims this could lead to reductions of 30% to 80% in drug prices, potentially saving American consumers billions.
"Most Favored Nation" Policy Explained
Under the proposed MFN policy, the U.S. would pay no more for medications than the lowest price paid by any other nation globally. This approach targets drugs administered in doctors' offices, such as cancer treatments and other injectables covered under Medicare Part B, which serves approximately 70 million older Americans. Trump asserts that this move will correct the longstanding disparity between U.S. drug prices and those in other countries, delivering substantial savings for American healthcare consumers.
Reviving a Previous Effort
This executive order revives a similar initiative from Trump's first term, which was blocked by a federal court after pharmaceutical companies filed lawsuits. The pharmaceutical industry has expressed strong opposition to the MFN model, arguing that it could undermine profits and stifle innovation. Trump has criticized the industry's pricing practices and lobbying influence, framing the new policy as a stand against these powerful interests.
Potential Impact and Industry Response
While the MFN policy could provide notable savings to the government, it is limited in scope and excludes most prescription drugs filled at pharmacies. The pharmaceutical industry has expressed strong opposition to the MFN model, arguing that it could undermine profits and stifle innovation. Trump has criticized the industry's pricing practices and lobbying influence, framing the new policy as a stand against these powerful interests.
Looking Ahead
The executive order is set to be signed on May 12, 2025, and will direct the Department of Health and Human Services to implement the MFN pricing model. While the policy is expected to face legal challenges, it marks a significant step in the ongoing debate over prescription drug pricing in the United States. As the order moves forward, its potential to reshape the pharmaceutical landscape and impact American consumers remains a topic of intense discussion.
Date: 12th May, 2025
