President Donald Trump, at the dawn of the week, took to his social media platform to proclaim a victory for the American wallet. He promises reduced costs, not just in our medical cabinets, but also at our gas stations, grocery stores, and energy bills.
The president is about to put his signature on an executive order that promises to ensure Americans pay the “lowest price anywhere in the world” for prescription drugs and pharmaceuticals. As Trump announced on Truth Social, “DRUG PRICES TO BE CUT BY 59%, PLUS! Gasoline, Energy, Groceries, and all other costs, DOWN. NO INFLATION!!! LOVE, DJT”.
The executive order, as Trump explains it, will instigate a “MOST FAVORED NATION’S POLICY” whereby the United States will pay the price equivalent to the country paying the lowest price anywhere in the world for drugs. The Department of Health and Human Services is to be directed to align what Medicare pays for medications with the lowest international price.
The president’s proposal will predominantly impact certain drugs covered by Medicare and administered in a doctor’s office — think cancer-treating infusions and other injectables. It might not be a silver bullet for all, but it could potentially offer significant savings to Uncle Sam’s coffers.
A report from Trump’s first term found that the U.S. spends twice as much as some other countries to cover the same medications. In 2021 alone, Medicare Part B drug spending topped a staggering $33 billion.
The stakes couldn’t be higher. Trump first tried to put his “most favored nation” policy into play in late 2020. But it was halted by federal courts and later rescinded by President Joe Biden in 2021. Now, Trump is again vowing to apply the policy to Medicare payments for specific drugs.