WASHINGTON—President Trump has signed a wide-reaching executive order on Monday directing drugmakers to lower the prices of their medicines to align with what other countries pay that analysts and legal experts said would be difficult to implement.
The executive order introduces a “Most Favored Nation” (MFN) drug pricing approach, which seeks to ensure Americans are not paying more for prescription drugs than consumers in similarly developed countries.
The order will give drugmakers price targets in the next 30 days, and will take further action to lower prices if those companies do not make "significant progress" towards those goals within six months of the order being signed.
Trump said at a press conference today that the government would impose tariffs on companies if the prices in the U.S. did not match those in other countries and said he was seeking cuts of between 59% and 90%.
"Everybody should equalize. Everybody should pay the same price," Trump said.
President Trump did not say which medication the executive order will apply to but claims the goal is to lower costs for patients.
“Today, Americans spend 70% more for prescription drugs than we spent in the year 2000. Think of that. Our country has the highest drug prices anywhere in the world, sometimes by a factor of five, six, seven, or eight times,” said the President.
The United States pays the highest prices for prescription drugs, often nearly three times more than other developed nations. Trump tried in his first term to bring the United States in line with other countries but was blocked by the courts.
The National Community Pharmacists Association issued the following statement on behalf of CEO B. Douglas Hoey on President Trump’s executive order reviving Most Favored Nation drug pricing:
“We need to get more details on the president’s executive order as this will take time to sort out due to the complicated nature of drug pricing in this country. However, we applaud any efforts to rein in pharmacy benefit manager practices that increase drug costs. We urge President Trump to continue to focus on PBM middlemen and the way they artificially inflate the price of prescription drugs to pad their pockets. In fact, it is not a coincidence that the United States pays more for drugs than any other country, and we are the only country in the world in which PBMs are hired to control drug prices. We believe those two facts are directly related. The president correctly pointed out that PBMs are the only link in the supply chain that produces nothing of value for patients. They don’t research, develop, or manufacture life-saving drugs. They don’t diagnose, treat, or counsel patients. They aren’t an access point for life saving drugs and related health care needs that are embedded in their local communities.
“We support a system that cuts out the PBM middlemen, where patients can access lower drug prices via essential local pharmacists, who are the medication experts on the health care team. However, no part of this effort should bypass patient safety and effectiveness by going around the pharmacist. Moving towards a more transparent, cost-plus payment model for drugs has always been a goal of NCPA.”
Michael Silber
HDA released a statement in response to the executive order (EO):
“As a sector saving the health care system approximately $63 billion annually, HDA and the nation’s pharmaceutical distributors share the Trump administration’s desire to reduce the cost of healthcare for all Americans. However, we are deeply concerned that the MFN approach — including the broadly referenced direct-to-consumer and importation provisions — could negatively impact access for providers and patients, as well as the long-term stability of the supply chain.
“HDA distributor members deliver 10 million medicines each day, connecting 1,200 manufacturers to 330,000 healthcare providers, pharmacies and other sites of care across the country. They do so while operating on the narrowest profit margins in healthcare (0.3 percent). This relentless focus on effectiveness and efficiency helps ensure providers get the right medications, on time, to provide the best care possible to their patients. As the administration implements various provisions within this Executive Order, it is critical that the pharmaceutical supply chain remains efficient and secure. Providers, patients and our healthcare system rely on it.
“While we have significant concerns about the EO as currently proposed, HDA and all of our members are committed to working with the White House to review and consider policies that lower out-of-pocket costs for American patients while improving access to quality care, supporting innovation, and maintaining a strong and resilient supply chain.”
