Trump Targets Big Pharma With Tough New Drug Pricing Rules

According to CNBC, Trump’s executive order encompasses a broad range of measures intended to combat what he described as “profiteering” by pharmaceutical companies and end what he sees as America subsidizing healthcare costs for other nations. While Trump did not name specific countries, he suggested the plan would target wealthier, developed nations with stronger negotiating power in drug pricing.

“Basically, what we’re doing is equalizing,” Trump said during a press event, adding that U.S. patients would pay the lowest global price available. “We will get whoever is paying the lowest price, that’s the price that we’re going to get.”

The White House did not specify which drugs the policy will cover, but officials said the scope of this executive order is broader than a similar attempt made during Trump’s previous term, which had applied only to Medicare Part B. According to CNBC, the new order will affect the commercial drug market as well as Medicare and Medicaid programs.

Officials emphasized a focus on high-expenditure drugs with steep international price disparities, hinting that medications for diabetes and weight loss, such as GLP-1 drugs, could be among those targeted.

Although Trump claimed the policy could slash drug prices by as much as 90% — and even cited a 59% price cut in a social media post — healthcare analysts remain skeptical. CNBC reported that J.P. Morgan analysts raised doubts about the policy’s feasibility, describing it as “challenging to practically implement” due to potential legal and legislative hurdles.

The pharmaceutical industry also responded swiftly. PhRMA, the leading lobby group for drugmakers, praised the move to hold foreign countries accountable but warned against importing foreign pricing systems. CEO Stephen Ubl stated that doing so could negatively impact the development of new treatments for American patients.

Related: Trump Considers Linking US Drug Prices to Global Benchmarks

Meanwhile, AARP voiced support for the executive action. In a statement, the group’s chief advocacy officer, Nancy LeaMond, said older Americans have “for too long” borne the burden of exorbitant drug costs, often forced to choose between essential medications and other basic needs.

Per CNBC, the order also tasks the U.S. Trade Representative and Department of Commerce with confronting what it calls “unreasonable and discriminatory” foreign policies that pressure drug companies into lowering prices abroad. Trump argued that countries with universal healthcare systems often exert unfair leverage over pharmaceutical firms during pricing negotiations.

To address domestic pricing directly, the order includes a directive for the Department of Health and Human Services to create a system enabling Americans to purchase drugs directly from manufacturers at the most favored nation price — a move intended to cut out costly intermediaries.

Despite the sweeping nature of the policy and its populist appeal, the pharmaceutical market reacted positively on Monday. Shares of several major drugmakers, including Merck, Pfizer, and Amgen, saw noticeable gains, suggesting that investors remain unconvinced the policy will lead to immediate upheaval.

Source: CNBC