US President Donald Trump has signed an executive order that. This executive order is an important step toward lowering prescription drug prices for Americans. Forthcoming actions Unlike similar recent measures taken in other cities, this order would be piccata shaped so-to-speak. It seeks to “harmonise” drug prices with the US and other countries, generating strong support and alarm from one prospective healthcare stakeholder to another.
The draft executive order calls for the United States to be given Most Favoured Nation (MFN) status. This means that drug companies would be required to match the lowest price for a drug sold abroad when marketing to US consumers. At the announcement, President Trump made the audacious claim that this plan would save millions on drug prices. He proposed a sevenfold decrease of “as soon as possible, by 30% to 80%.”
Trump’s Health Secretary, Robert F Kennedy Jr., emphasized that high drug prices have long been a major concern for Democrats and a key target of socialist Senator Bernie Sanders’ presidential campaigns. This further highlights the political importance of the issue, as it remains a key area of debate among legislators.
While campaigning in 2016, Trump and his health officials continued to fill in the details of this executive order. They used that moment to illustrate how pharmaceutical lobbying power and massive donations to members of Congress pose significant challenges to lowering drug prices. The president was on the mark when he said, “The drug lobby is the most powerful,” expressing the strong counterforces against making significant change a reality.
The US healthcare system is a very complicated one. It comprises the enormous private insurance industry, employer subsidies, and the publicly funded Medicare and Medicaid programs for the elderly and poor. This complexity adds an additional layer of opacity to drug pricing. Alan Sager, a professor of health policy at Boston University, remarked on the opaque nature of pricing in the US market.
In 2021, the US Government Accountability Office performed such a comparison. They discovered that US prescription drugs are, on average, 2-4 times higher than countries such as Australia, Canada, and France. Such disparities have fueled calls for reform.
The new executive order requires that US officials track every agreement foreign nations enter into for their drug prices. They need to defuse these arrangements so that they won’t lead to “unreasonable or discriminatory” increases in price for American consumers. This part of the order is an important step in safeguarding US patients from the negative consequences that may arise from these international pricing negotiations.
John F. Crowley, president of the Biotechnology Innovation Organization, expressed adamant opposition. In short, he is dead set against the proposed MFN status as set forth in the order. He described it as “a deeply flawed proposal that would devastate our nation’s small- and mid-size biotech companies.” He said that patients and families should not be used as pawns in trade negotiations.
“Patients and families are not a bargaining chip in a trade war, but that’s exactly how they are being treated – first through proposed tariffs on our nation’s medicines, now with foreign reference pricing in the name of fairness.” – John F Crowley
Even with the aspirational goals set forth in the executive order, experts say they’re not buying its likely effects. C Michael White, a pharmacy professor at the University of Connecticut, stated that the results of the Trump administration’s actions on drug prices “will be minimal for many Americans.” This feeling mirrors worries that although the order could produce a splash in the headlines, its real-world impacts might not live up to the hype.
Alan Sager had similarly strong words on the administration’s release, casting doubt on their follow-through with real, meaningful action. He noted, “Will they act? Maybe. Will they claim they act? Sure.” Furthermore, he expressed uncertainty regarding whether this order would result in lasting reductions in US drug prices: “Whether this will signal a durable and meaningful cut in extraordinarily high US drug prices is very unclear.”
The pharmaceutical industry has expressed concern over uncertainty since Trump’s announcement. Stephen J Ubl, president of the Pharmaceutical Research and Manufacturers of America, criticized the proposal, arguing that “importing foreign prices from socialist countries would be a bad deal” for American patients. His remarks are part of a larger narrative worried that these types of measures will stifle innovation and access to new medicines.
When the executive order was announced, the stock valuations of the largest pharmaceutical companies played musical chairs. Firms such as Pfizer, Eli Lilly and Britain’s GSK began to reap the rewards right away. Market reactions indicate that there is a profound concern among investors about the far reaching implications of such proposed changes.