Trump signs executive order aiming to slash drug costs in US by 50%
World: Prescription drug prices are notoriously high in the US, which has less than 5% of the global population but accounts for nearly three-quarters of global pharmaceutical profits.
US President Donald Trump signed an executive order Monday that aims to cut prescription drug costs in the US by aligning what the government pays for certain medications with the prices paid in other countries. The order, experts say, is far more aggressive than the one during Trump’s first term to cut drug costs, which was blocked by a federal judge and failed hence.
Health policy experts feel the order will meet significant opposition from the drug industry.
The new order directs Health and Human Services Secretary Robert F. Kennedy Jr. to come up with price-cutting goals within 30 days, White House officials said on Monday.
The move will kick off a round of negotiations between the health secretary and the drug industry and if the talks fail, Kennedy will move to enforce the “most favoured nation” pricing model, capping the drug prices in the US at the lowest rates paid by other wealthy nations.
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Officials highlighted that this time the policy will not be limited to certain drugs under Medicare, as in the previous version, but will also target medications covered by Medicaid and private insurance.
“I’m doing this for the American people,” Trump said at the White House, discussing the executive order. “I’m doing this against the most powerful lobby in the world probably, the drug lobby.”
The administration hasn’t picked any specific class of drugs for price cuts, but officials said that drugs like Ozempic, Wegovy and Zepbound will also be included.
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Last month, the Trump administration rejected a Biden-era proposal for Medicare to cover weight loss drugs. The plan would have saved patients money but cost the government about $25 billion over 10 years.
The Food and Drug Administration will also consider importing prescription drugs from countries besides Canada, where prices are often lower than in the US.
The Department of Justice and the Federal Trade Commission will be directed to act against “anti-competitive” actions by drugmakers that keep drug prices high, said officials.
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Prescription drug prices are notoriously high in the US, which has less than 5% of the global population but accounts for nearly three-quarters of global pharmaceutical profits. Rand Corporation, a public policy think tank, says Americans pay up to 10 times more for medications than people in other similarly wealthy nations.
Many experts back Trump’s approach but doubt how the administration would pursue price reductions for drugs under private insurance.
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In a Truth Social post on Sunday, Trump claimed that prescription drug costs would be reduced “almost immediately” by 30% to 80% and that the US “will pay the same price as the Nation that pays the lowest price anywhere in the World.”
In a follow-up post Monday, Trump said drug prices would be cut by 59%. At the White House later on Monday, Trump claimed drug prices would be reduced by 50% to 90%.