President Donald Trump announced plans to sign an executive order aimed at significantly reducing prescription drug prices in the United States. The proposed policy, known as the “Most Favored Nation” (MFN) pricing model, would align U.S. drug prices with those of countries that pay the lowest rates globally, potentially cutting costs by 30% to 80%.
The MFN approach seeks to ensure that Americans do not pay more for medications than citizens of other developed nations. Trump emphasized that this initiative is intended to bring fairness to American consumers and alleviate the financial burden of high healthcare costs.
This policy is a revival of a similar proposal from Trump’s first term, which faced legal challenges and was ultimately blocked by a federal court. The new executive order is scheduled to be signed at 9 a.m. Eastern Time on Monday.
While specific details of the implementation have not been disclosed, the policy is expected to impact Medicare Part B drugs, such as cancer treatments and injectable medications. It would not apply to common prescription drugs filled at pharmacies.
The pharmaceutical industry has expressed strong opposition to the MFN policy, arguing that it could hinder innovation and place price control power in the hands of foreign governments. Trade groups like the Pharmaceutical Research and Manufacturers of America (PhRMA) contend that addressing middlemen in the supply chain would be a more effective solution.
Trump dismissed these criticisms, accusing pharmaceutical companies of misleading Americans about research costs and exploiting them financially. He stated that his decision is not influenced by campaign contributions and aims to bring fairness to American consumers.
The announcement has already impacted the stock market, with shares of major pharmaceutical companies experiencing declines amid concerns over potential revenue losses. As the executive order moves forward, its effects on drug pricing and the broader healthcare industry will be closely monitored.
