Trump signs executive order intended to lower drug prices

President Donald Trump signed a wide-reaching executive order on May 12 directing drugmakers to lower the prices of their medicines to align with what other countries pay.

• The Order directs the U.S. Trade Representative and Secretary of Commerce to take action to ensure foreign countries are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the United States.
• The Order instructs the Administration to communicate price targets to pharmaceutical manufacturers to establish that America, the largest purchaser and funder of prescription drugs in the world, gets the best deal.
• The Secretary of Health and Human Services will establish a mechanism through which American patients can buy their drugs directly from manufacturers who sell to Americans at a “Most-Favored-Nation” price, bypassing middlemen.
• If drug manufacturers fail to offer most-favored-nation pricing, the Order directs the Secretary of Health and Human Services to: (1) propose rules that impose most-favored-nation pricing; and (2) take other aggressive measures to significantly reduce the cost of prescription drugs to the American consumer and end anticompetitive practices.

President Trump issued the following statement: “In case after case, our citizens pay massively higher prices than other nations pay for the same exact pill, from the same factory, effectively subsidizing socialism aboard [abroad] with skyrocketing prices at home. So we would spend tremendous amounts of money in order to provide inexpensive drugs to another country. And when I say the price is different, you can see some examples where the price is beyond anything — four times, five times different.”

According to a Reuters report, the order gives drugmakers price targets in the next 30 days, and will take further action to lower prices if those companies do not make "significant progress" towards those goals within six months of the order being signed.

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Trump told a press conference that the government would impose tariffs on companies if the prices in the United States did not match those in other countries and said he was seeking cuts of between 59% and 90%."Everybody should equalize. Everybody should pay the same price," Trump said, per the report. 

The report also pointed out that the United States pays the highest prices for prescription drugs, often nearly three times more than other developed nations. Trump tried in his first term to bring the United States in line with other countries but was blocked by the courts.

Trump said his order on drug prices came about partly because of a conversation with an unnamed friend who told the president he got a weight loss injection for $88 in London and that the same injection in the United States cost $1,300, per the report.

If drug companies don't meet the government’s expectations, it will use rulemaking to bring drug prices to international levels and consider a range of other measures, including importing medicines from other developed nations and implementing export restrictions, a copy of the order showed. The order also directs the U.S. Federal Trade Commission to consider aggressive enforcement against what the government calls anti-competitive practices by drugmakers, the Reuters report said.

The report cited a White House official who said, "We're all familiar with some of the places where pharmaceutical companies push the limits to prevent competition that would lower their prices," and pointed to patent protections and deals drugmakers make with generic companies to hold off on cheaper copies.