Trump’s Executive Order on Drug Prices: Misplaced Blame and Market Realities
BY MELISSA GOLDIN
President Donald Trump has drawn criticism following his claim that foreign nations are responsible for high prescription drug prices in the U.S., during a signing of an executive order aimed at reducing costs. The order gives drugmakers 30 days to lower U.S. prices voluntarily, or face restrictions tied to prices in other countries.
Experts reveal that Trump’s assertions are misleading. While drug prices are indeed higher in the U.S. compared to other high-income nations, the reasons are complex and largely related to how drugs are priced and negotiated in America. A report from RAND indicates that U.S. drug prices were 2.78 times higher than in 33 comparable countries in 2022. The fragmented U.S. market allows drug companies to negotiate differently than in nations with centralized negotiations, contributing to inflated costs.
Trump’s order introduces a "most favored nation" pricing model, which could indirectly relate U.S. drug prices to those of other developed countries. However, many experts caution that this could lead to undisclosed discount arrangements in those countries, which might not impact U.S. pricing as intended.
Ultimately, while growing government influence may reform drug pricing strategies, the overall pharmaceutical landscape remains profit-driven, complicating price reduction efforts.
Note: The image is for illustrative purposes only and is not the original image of the presented article.
