President Trump announced Sunday night that he plans to reduce pharmaceutical drug prices by 30% to 80% by establishing a “Most Favored Nation” policy.
He said in a post on his Truth Social site that the U.S. will pay a price that will be based on a medicine’s lowest cost in another part of the world.
“I will be signing one of the most consequential Executive Orders in our Country’s history. Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%,” he wrote on his social-media site..
“They will rise throughout the World in order to equalize and, for the first time in many years, bring fairness to America! I will be instituting a Most Favored nation’s policy whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World.”
He continued, “Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before.”
Americans pay the most for drugs compared to the rest of the world, usually about three times the amount in other wealthy countries.
Trump agenda advocates at the America First Policy Institute say “less freeloading by other countries could also lower costs for Americans.”
Drug manufacturers would face two options under the MFN policy. They could either raise their prices in other countries so they can sustain their prices in the United States or lower their American prices to match the lowest price they offer in other countries.
AFPI notes that these “incentives would encourage drug manufacturers to reduce or even terminate the discounts they offer other countries and lead these countries to contribute more funding to pharmaceutical innovation.”
The president initially attempted to adopt a similar policy in 2020 to slash drug costs, but a federal judge prevented him from doing so after groups representing the pharmaceutical industry filed a lawsuit to halt the policy’s implementation.
The 2020 plan would have tied prices of Medicare Part B drugs, which are medicines dispensed in a health-care facility, to the cost of drugs in countries such as Canada, Germany and Britain.
Mr. Trump’s first administration estimated that U.S. taxpayers would save more than $85 billion over seven years, which would cut into U.S. annual spending of over $400 billion on drugs.
Mr. Trump said in his Sunday evening post that for many years many have “wondered” why prescription drugs and pharmaceuticals in the U.S. were so much more expensive than the rest of the world.
Sometimes being “five to ten times” more expensive than the same drug, made in the same plant by the same company.
“It was always difficult to explain and very embarrassing because, in fact, there was no correct or rightful answer,” he said.
“The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, alone,” the president stated.
