Trump signs an order to reduce drug prices, but it's unclear how it would work

President Trump, joined by National Institutes of Health Director Jay Bhattacharya and Health and Human Services Secretary Robert F. Kennedy Jr., talks astir an enforcement bid aimed astatine reducing the outgo of medicine drugs. Andrew Harnik/Getty Images hide caption

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Andrew Harnik/Getty Images

President Trump is taking purpose astatine U.S. cause prices with an enforcement order geared toward forcing cause companies to lucifer the little prices paid successful different developed countries.

If drugmakers don't bash it voluntarily, the medication is threatening to straight necktie cause prices paid by authorities programs similar Medicare to those paid successful different countries.

"Whoever is paying the lowest price, that's the terms that we're going to get," Trump said successful an announcement astatine the White House, explaining what helium called "most favored nation" pricing.

He said drugmakers would person to chopped their U.S. prices to the level paid by different developed countries—or look consequences. "If necessary, we'll analyse the cause companies, and we'll, successful particular, analyse the countries that are doing this," helium said. He besides said that the U.S. marketplace would beryllium opened to imports from different countries.

Patients successful the U.S. mostly wage much for drugs than patients successful different countries, mostly due to the fact that different countries person authorities wellness attraction systems that acceptable prices they are consenting to pay. The U.S., by and large, doesn't acceptable prices, truthful cause companies person much state to spot what prices the marketplace present volition bear.

"We've been subsidizing different countries passim the world" by paying higher prices, Trump said astatine the White House Monday, joined by leaders of national wellness agencies.

The enforcement bid lays retired aggregate approaches to little prices

The caller enforcement bid has aggregate parts. It directs the U.S. Trade Representative and Department of Commerce to instrumentality enactment against "unreasonable and discriminatory policies" that little cause prices abroad, though it's not wide what authorization the White House has successful this regard. It besides directs Health and Human Services Secretary Robert F. Kennedy Jr. to facilitate direct–to-consumer income that bypass wellness security astatine little prices.

The bid says that wrong 30 days the medication volition springiness terms targets to drugmakers "to bring prices for American patients successful enactment with comparably developed nations." The bid lays retired actions the medication would instrumentality if drugmakers don't comply voluntarily, specified arsenic rulemaking to enforce the prices. It's unclear successful the abbreviated word what ineligible authorization the medication would person to enforce the order.

Trump said helium doesn't deliberation the determination would wounded cause companies' quality to marque wealth due to the fact that they volition enactment unit connected different countries to marque up the quality by raising their prices. "Europe's going to person to wage a small spot more," Trump said. "The remainder of the satellite is going to person to wage a small spot more, and America is going to wage a batch less."

Trump teased the latest "most favored nation" terms argumentation connected Truth Social Sunday night, prompting the commercialized radical Pharmaceutical Research and Manufacturers of America, oregon PhRMA, to travel retired against the enforcement order, calling it a "bad woody for American patients."

After the enforcement bid was announced, PhRMA president and CEO Steve Ubl said successful a statement: "To little costs for Americans, we request to code the existent reasons U.S. prices are higher: overseas countries not paying their just stock and middlemen driving up prices for U.S. patients." He added, "The Administration is close to usage commercialized negotiations to unit overseas governments to wage their just stock for medicines. U.S. patients should not ft the measure for planetary innovation."

Most favored federation pricing was projected before

Trump primitively signed an executive bid on astir favored federation pricing successful precocious 2020 during his archetypal word that would person tied Medicare Part B cause prices to those successful different countries. But the enforcement bid faced tribunal challenges and was yet dropped by the Biden administration. On the run way past year, Trump  said helium would reinstate the astir favored federation enforcement bid from 2020, but a video astir it disappeared from Trump's 2024 run website.

Medicare began negotiating cause prices for the archetypal clip during the Biden medication successful 2024, nether caller authorization granted by the Inflation Reduction Act. The caller little Medicare prices for the archetypal 10 drugs won't spell into effect until January 2026, but the discounts range from 79% for diabetes cause Januvia to 38% for humor crab cause Imbruvica. Now, the Trump medication is negotiating the 2nd batch of cause prices for 15 medicines successful accordance with the law.

During the White House announcement, Dr. Mehmet Oz, who leads the Centers for Medicare and Medicaid Services nether Trump, pointed retired that adjacent the little negotiated Medicare prices are higher than what radical wage successful Europe for the aforesaid products. "Half the clip we're paying 3 times much than is paid successful different countries. It doesn't marque immoderate consciousness for the system."

Oz says the caller enforcement bid volition bring those prices down adjacent further.