President Donald Trump signed an executive order on Monday directing drug prices to be cut by an estimated 59%.
“The United States has less than five percent of the world’s population and yet funds around three quarters of global pharmaceutical profits,” the order says. “This egregious imbalance is orchestrated through a purposeful scheme in which drug manufacturers deeply discount their products to access foreign markets, and subsidize that decrease through enormously high prices in the United States.”
Under the new order, “Americans should not be forced to subsidize low-cost prescription drugs and biologics in other developed countries, and face overcharges for the same products in the United States.”
Americans should “have access to the most-favored-nation price for these products,” the order explains. “My Administration will take immediate steps to end global freeloading and, should drug manufacturers fail to offer American consumers the most-favored-nation lowest price, my Administration will take additional aggressive action.”
The order directs the Secretary of Commerce and the United States Trade Representative to “take all necessary and appropriate action to ensure foreign countries are not engaged in any act, policy, or practice that may be unreasonable or discriminatory or that may impair United States national security and that has the effect of forcing American patients to pay for a disproportionate amount of global pharmaceutical research and development, including by suppressing the price of pharmaceutical products below fair market value in foreign countries.”
A White House fact sheet on the order says the U.S. funds an estimated 75% of pharmaceutical profits worldwide.
President Trump announced Sunday evening that the executive order would be reduced 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! I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World,” Trump wrote on Truth Social. “Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before.”
On Monday morning, Trump estimated that drug prices could be cut by 59%.
