Trump signs executive order to slash prescription drug prices

(The Daily Signal) – President Donald Trump announced on Sunday a new prescription drug initiative he promises will dramatically—and immediately—reduce the price of pharmaceuticals.

“I am pleased to announce that Tomorrow morning, in the White House, at 9:00 A.M., I will be signing one of the most consequential Executive Orders in our Country’s history,” Trump said in a Sunday evening announcement on X. “Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%. They will rise throughout the World in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA!”

The president said he will institute a “most favored nation’s” policy under which Americans will pay “the same price as the Nation that pays the lowest price anywhere in the World.”

The executive order, signed Monday morning, includes the following:

• The Order directs the U.S. Trade Representative and Secretary of Commerce to take action to ensure foreign countries are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the United States.
• The Order instructs the Administration to communicate price targets to pharmaceutical manufacturers to establish that America, the largest purchaser and funder of prescription drugs in the world, gets the best deal.
• The Secretary of Health and Human Services will establish a mechanism through which American patients can buy their drugs directly from manufacturers who sell to Americans at a “Most-Favored-Nation” price, bypassing middlemen.
• If drug manufacturers fail to offer most-favored-nation pricing, the Order directs the Secretary of Health and Human Services to: (1) propose rules that impose most-favored-nation pricing; and (2) take other aggressive measures to significantly reduce the cost of prescription drugs to the American consumer and end anticompetitive practices.

Drugs produced by U.S. pharmaceutical companies are frequently priced far lower overseas. In his statement, Trump rejected what he contended was the argument from drug companies that research and development costs had to be borne by U.S. consumers, saying the manufacturers were making “suckers” of Americans.

Drugmakers believe actions such as the one Trump will take Monday reduce incentives to develop new drugs and are harmful in the long run.

“Government price setting in any form is bad for American patients,” said Alex Schriver, a spokesperson for the Pharmaceutical Research and Manufacturers of America—known as PhRMA—in a statement to Reuters when asked about Trump’s planned executive order.

Trump claimed he is able to take this action while others won’t because he is immune to the political effect of pharmaceutical company campaign donations.