Today, President Donald J. Trump signed an Executive Order aimed at reducing the prices that Americans and taxpayers pay for prescription drugs. This significant step aligns the costs of medications in the United States with those in similar nations. The Executive Order directs the U.S. Trade Representative and the Secretary of Commerce to take decisive actions against foreign countries that engage in practices that unfairly undercut market prices, leading to price hikes in the United States.
The Order also instructs the Administration to communicate specific price targets to pharmaceutical manufacturers. This initiative aims to ensure that America, as the largest purchaser and funder of prescription drugs globally, secures the best deal possible. Additionally, the Secretary of Health and Human Services will establish a mechanism allowing American patients to purchase drugs directly from manufacturers at a “Most-Favored-Nation” price, effectively bypassing middlemen that inflate costs.
Should drug manufacturers fail to comply with offering the most-favored-nation pricing, the Order mandates that the Secretary of Health and Human Services propose rules to enforce this pricing structure. Moreover, it directs the Secretary to take aggressive measures to significantly lower the cost of prescription drugs for American consumers and to eliminate anticompetitive practices.
President Trump continues to take bold action to prevent pharmaceutical manufacturers from imposing exorbitant drug prices on Americans while providing substantial discounts to other wealthy nations. Recent data reveals that Americans pay more than three times the price for brand-name drugs compared to other OECD nations, even after factoring in the discounts provided by manufacturers in the U.S.
Despite representing less than five percent of the global population, the United States funds approximately 75% of global pharmaceutical profits. Drug manufacturers often offer discounts to access foreign markets, subsidizing these discounts with the inflated prices charged in the U.S. This practice essentially forces American consumers to subsidize both drug-manufacturer profits and foreign healthcare systems, despite these manufacturers benefiting from significant research subsidies and extensive healthcare spending by the U.S. Government.
During his first term, President Trump took historic measures to ensure that Medicare and seniors would not pay more for drugs than economically comparable countries. Unfortunately, the Biden Administration rescinded these initiatives before they could take effect, leading to negotiations that resulted in prices averaging 78 percent higher in comparison to 11 similar countries, as part of Biden’s effort to reform Medicare.
President Trump is fulfilling his commitment to prioritize American patients and taxpayers by advancing efforts to secure a fair deal for prescription drugs. This latest Executive Order builds upon actions from his first term aimed at reducing price disparities and now includes Medicaid alongside Medicare in its scope.
In addition, President Trump recently signed an Executive Order to further lower drug prices, which includes substantial discounts for low-income patients needing lifesaving medications, facilitating importation programs, and increasing access to generic and biosimilar medicines. He is also dedicated to enhancing drug price transparency, having signed an Executive Order to build on his previous efforts during his first term.
President Trump has been relentless in addressing the unfair and outrageous prices Americans face for prescription drugs. He stated, “In case after case, our citizens pay massively higher prices than other nations pay for the same exact pill, from the same factory, effectively subsidizing socialism abroad with skyrocketing prices at home. We spend tremendous amounts of money to provide inexpensive drugs to another country, and the price differences can be staggering—four times, five times more.”
