Trump seeks to lower US drug costs by challenging prices in other countries

President Donald Trump is set to sign an executive order Monday morning that promises to crack down on “unreasonable and discriminatory practices” by foreign countries that suppress drug prices abroad, a White House official said.

President Donald Trump is set to sign an executive order Monday morning that promises to crack down on “unreasonable and discriminatory practices” by foreign countries that suppress drug prices abroad, a White House official said. It will apply to a wide range of drugs and to prices in the commercial market, as well as Medicare and Medicaid and will likely spark fierce legal battles. If prices do not come down quickly, the administration will look at various policy levers that can be used to force prices down, the official told reporters Monday. The mandate also calls for the Department of Health and Human Services to negotiate lower prices across all markets. If no progress is made, the agency will implement a rule to impose the “Most Favored Nation” cost for the drug, which would be the lowest price available among peer countries. The action, if implemented, goes far beyond Trump’s implementation of a “Most Favored Nation” policy in his first term, which was quickly blocked by federal courts for procedural reasons before being rescinded by then-President Joe Biden in 2021. That rule would have imposed the lowest price paid by a peer country on 50 Medicare Part B drugs that are administered in medical offices. At the time, Medicare was barred from negotiating drug prices, but that changed with the 2022 passage of the Democrats’ Inflation Reduction Act, which gave Medicare the historic power to bargain over prices for a small number of drugs annually. It’s unclear how quickly Americans will see lower prices and what authority the US government has to direct drug pricing in other countries.