Trump Executive Order Aims to End Inflated Prescription Drug Costs

Earlier today, President Trump announced an executive order to deliver most favored nation status for the United States in an effort to help lower the cost of prescription drugs to American patients.

In a Truth Social post, the President wrote, “Starting today, the United States will no longer subsidize the healthcare of foreign countries—and we'll no longer tolerate profiteering and price gouging from Big Pharma.” In the press briefing to announce the order, Trump stated that other countries pay a “small fraction” of the price for the same pharmaceutical drugs versus what Americans pay.

Trump called it one of the most consequential executive orders in our country’s history. He stated, “I don’t think there’s ever been anything signed like this, certainly not with respect to health care. Nothing even close.”

According to White House officials, the United States accounts for roughly 4% of the global population, yet contributes to two-thirds of total pharmaceutical profits.

Trump said he wants to “equalize” the costs of pharmaceuticals across the nations.

Most favored nation pricing will reduce the cost of pharmaceuticals to the lowest price offered to any other developed country. “We will bring fairness to America. Drug prices will come down by - much more really, if you think,” the President said, claiming prices for drugs could see an up to a 50% to 90% decrease in cost. President Trump named the controversial drug, Ozempic, saying it costs ten times more in other developed nations than it does in the United States.

In addition, Trump said his plan will cut out the “middle men” in drug sales, which usually refers to the Pharmacy Benefit Managers (PBM). PBM’s work to help negotiate costs and payments between drug manufacturers, pharmacies, and healthcare insurance providers, but often inflate prices to take a piece of the profits for themselves. Or, he could have meant wholesale distributors of pharmaceuticals such as AmerisourceBergen and Cardinal Health, but Trump did not outline the details of the measure.

However, Trump walked a fine line, careful to not attack the pharmaceutical companies directly. “I’m not knocking the drug companies,” he said. “I’m really more knocking the countries than the drug companies, because they’re forced to do things.” He specifically called out the European Union calling them “the most difficult” and, “in many ways, nastier than China.”

At the same time, he commented that pharma companies are “very powerful.” Trump aso took the opportunity to take a shot at Democrats, blaming them for protecting pharma. “These are the Democrats,” he said, calling Obamacare “a failure.”

HHS Secretary Kennedy followed up Trump’s statements providing details on the pharmaceutical lobby. “Congress is controlled in so many ways by the pharmaceutical industry,” Kennedy stated. “There’s at least one pharmaceutical lobbyist for every congressman, every senator on Capitol Hill, and every member of the Supreme Court, by some estimates, it’s three.” This is what made pharmaceutical drug pricing “radioactive,” according to Kennedy.

He also praised President Trump saying “there has never been a President more willing to stand up to the oligarchs than President Donald Trump.” Echoing Kennedy’s remarks about the President, new director, Dr. Mehmet Oz said the policy change “[is] only happening because we have a president with the fortitude - the guts - to stand up to the withering criticism and lobbying that's going to occur as soon as folks hear about the executive order.”

The executive order sets a 30 day deadline for compliance. If drugmakers do not voluntarily comply, Trump said that he would use the power of the federal government, although he did not specify actions his administration would, or could, take.

Pharmaceutical stocks rebounded after an initial dip, with analysts saying legal opposition will pose a significant challenge to the executive order.

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