President Donald J. Trump has signed an executive order described as an “aggressive” move aimed at dramatically lowering the cost of prescription drugs for American patients. The order mandates that U.S. prices for medications and biologics should not exceed the lowest rates paid by other developed nations, a concept referred to as “most-favored-nation” pricing.
The executive order sharply criticizes the current system, stating that the United States disproportionately funds global pharmaceutical profits and research while its citizens face significantly higher prices for the same drugs compared to people in other developed countries.
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The order calls this an “egregious imbalance” and argues that Americans are effectively subsidizing lower drug costs abroad through inflated prices at home – a practice it terms “price discrimination” and “global freeloading.”
“Americans will no longer be forced to pay almost three times more for the exact same medicines,” the order states, emphasizing that the U.S., as the largest purchaser of pharmaceuticals globally, “should get the best deal.”
The order directs the Secretary of Health and Human Services (HHS) to immediately begin implementing the “most-favored-nation” policy. This includes communicating specific price targets to pharmaceutical manufacturers within 30 days to bring U.S. prices in line with those in comparable developed nations.
Should manufacturers fail to make “significant progress” towards these price targets, the executive order outlines several potential “additional aggressive action[s].” These measures could include:
- Proposing a formal rulemaking process to impose most-favored-nation pricing.
- Considering certifying that importing drugs from developed countries with lower prices would be safe and cost-saving, potentially paving the way for easier importation.
- Pursuing antitrust enforcement against anti-competitive practices within the pharmaceutical industry.
- Reviewing and potentially taking action regarding the export of drugs or precursor materials that contribute to price disparities.
- Reviewing and possibly modifying or revoking approvals for drugs found to be unsafe, ineffective, or improperly marketed.
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Furthermore, the order directs the Secretary of Commerce and the United States Trade Representative to address foreign government actions that might force American patients to shoulder a disproportionate share of global pharmaceutical research and development costs by suppressing prices abroad. HHS is also instructed to facilitate programs allowing consumers to buy directly from manufacturers willing to sell at the most-favored-nation price.
The executive order asserts that its goal is to ensure Americans are no longer unfairly burdened by high drug costs and receive fair prices for their medications, stating the administration will take all available action to address the issue. The order notes that implementation must be consistent with applicable law and available appropriations.
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