On Sunday, President Trump signed an executive order aimed at lowering drug prices, saying that the American people deserve to pay “the same low price Big Pharma gives to other countries.”
The intention of the executive order is to lower drug prices through linking them to the cost of the same drugs in other countries.
President Trump immediately sent out a tweet celebrating the order, stating: “Just signed a new Executive Order to LOWER DRUG PRICES! My Most Favored Nation order will ensure that our Country gets the same low price Big Pharma gives to other countries.”
Just signed a new Executive Order to LOWER DRUG PRICES! My Most Favored Nation order will ensure that our Country gets the same low price Big Pharma gives to other countries. The days of global freeriding at America’s expense are over…
— Donald J. Trump (@realDonaldTrump) September 13, 2020
“The days of global freeriding at America’s expense are over and prices are coming down FAST! and prices are coming down FAST! Also just ended all rebates to middlemen, further reducing prices,” Trump added.
Due to the executive order, the Secretary of Health and Human Services must “immediately” test a payment model, for specific “high-cost” prescription drugs and products, for Medicare to pay “no more than the most-favored-nation price,” referring to the lowest prices paid in other countries.
Many Republicans oppose the executive order, referring to it as a “price control”, but expensive drug prices are a very important issue for voters.
It is not apparent when the order will go into effect, as there are administrative steps that need to be taken before it can be implemented. There are many questions about how the order will work in practice, and the Secretary of Health and Human Services needs to issue further details surrounding the order.
President Trump had previously signed four executive orders aimed at lowering prescription drug costs on July 24th. This new order was delayed, as the president wanted to reach an agreement with the pharmaceutical industry. On Sunday, the White House announced that they had not reached an agreement.
Many in the pharmaceutical industry denounced the president’s actions, and even suggested they may sue. “With scientists and researchers at America’s biopharmaceutical companies working around the clock to fight a deadly pandemic, it is simply dumbfounding that the Trump administration would move forward with its threat to import foreign price controls and the inevitable delays to innovation that will follow,” said Michelle McMurry-Heath, CEO of the Biotechnology Innovation Organization.
At the moment, these executive orders only apply to Medicare drug prices, but the president has spoken in the past about lowering drug prices for all Americans.