The longstanding reality of high U.S. drug prices has driven Democratic and Republican efforts to bring them down.
And Sen. Bernie Sanders, I-Vt., has made lowering drug prices a cornerstone issue during his political career.
What would Trump’s executive order do?
Referring to high U.S. drug prices, Trump told Hannity that “I ended it” by issuing the executive order.
The executive order also could face court challenges, just as Trump’s first-term executive order encountered.
PolitiFact was where this article first appeared.
President Donald Trump stated his strong desire for an executive order to lower the cost of pharmaceuticals.
Trump wrote on Truth Social that “prescription drug and pharmaceutical prices will be reduced, almost immediately, by 30 percent to 80 percent” on May 11, the day before he hosted a White House event to sign the executive order. “.”.
WATCH: What to anticipate following Trump’s signing of an order requiring pharmaceutical companies to reduce their prices.
However, the president’s description of how quickly consumers could benefit from this potential boon was undermined by the executive order’s wording, which was released on May 12.
He stated that the executive order was intended to reduce the exorbitant costs of prescription drugs in the United States. S. to more normal levels in other nations.
Trump declared during the signing of the order, “We’re going to equalize.”. “Everyone will pay the same amount. We’ll pay what Europe does. “.”.
Although experts warned that the order’s necessary procedural steps would make it far from an immediate fix, they noted that Trump’s action might potentially lower the cost of prescription drugs, possibly by the 30 to 80 percent scale Trump claimed.
In order to pressure pharmaceutical companies to “bring prices for American patients in line with comparably developed nations,” the executive order mandates that administration officials identify and notify the companies of what Trump refers to as the “most favored nation price targets” within 30 days. “.”.
The administration will determine whether “significant progress” toward lower pricing has been made after an indeterminate amount of time. Should this not be the case, the order mandates that the secretary of health and human services “propose a rulemaking plan to impose most-favored-nation pricing,” which may not be implemented for months or even years.
Joseph Antos, an emeritus senior fellow in health care policy with the conservative American Enterprise Institute, said that executive orders are wish lists. The directive “asks manufacturers to unilaterally reduce U. A. the cost. Without this unlikely scenario, it is unclear who has the legal right to interfere in the market. “”.
White House officials who were asked for comment did not offer any proof that the executive order would have an instant impact.
Why do Americans have to pay more for prescription drugs?
Everyone agrees that the cost of drugs in the United States is abnormally high. S. Compared to other developed, industrialized nations that make up the Organization for Economic Cooperation and Development, the average amount spent by Americans on pharmaceuticals is almost three times higher per capita.
The Rand Corporation’s study. is an independent research group, discovered that, among all medications, U. A. Prices in 33 OECD countries were 2 points 78 times lower. For name-brand medications, the difference was even greater, with U. S. prices are 4–22 times higher on average.
The U. S. does not pay as much as similar countries for generic, unbranded medications, which make up around 90% of all prescriptions filled in the United States. S. However, generics only make up a fifth of U.S. S. . the cost of prescription drugs.
Experts attribute this price disparity to a number of factors.
One is the United States. S. Compared to other nations, it negotiates prices with drug manufacturers less frequently. Frequently, another nation will reject a drug application if they don’t believe that the increased expense of the new medication is warranted by better outcomes. Certain nations also impose price controls.
The exclusivity of patents is another factor. Throughout the years, U. S. . Pharmaceutical companies have accumulated patents that can prevent generic competitors from entering the market by utilizing robust legal protections.
Additionally, drug companies have maintained that high prices contribute to the funding of research and development for new and improved medications. When Trump issued the executive order, Stephen J. “It would mean fewer treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America,” said Ubl, president and CEO of the drug industry association PhRMA, in a statement. Trump provided a different account of what drug company representatives told him in an interview with Fox News’ Sean Hannity on May 13, stating that they concurred that “it’s time” to lower U.S. S. costs. ().
See: Trump vows to give pharmaceutical companies a 30-day window to reduce the cost of prescription drugs.
The notion that research and development is funded by high prices has been called into question by recent studies. According to a 2023 study, between 1999 and 2018, the top 15 biopharmaceutical companies in the world spent more money on marketing and other general and administrative tasks than on research and development. The majority of new medications created during this time, according to the study, provided little to no clinical advantage over current therapies.
High U has long been a reality. S. . Republican and Democratic attempts to lower drug prices have been fueled by these costs. In order to force Medicare, the federal health care program that covers Americans over 65, to bargain with the manufacturers of some well-known, expensive medications, then-President Joe Biden signed legislation. Sen as well. Sanders, Bernie I-Vt. has made reducing drug costs a primary focus of his political career.
Trump attempted to reduce Medicare prescription drug costs during his first term, but the courts halted the action on procedural grounds.
Bipartisan support for Trump’s drug price campaign is possible, according to experts.
Jonathan Cohn, a former employee of a number of left-leaning media organizations and author of two books on health care policy, moderately praised Trump’s executive order in The Bulwark, a publication that is typically critical of Trump, describing it as “a serious policy initiative, one that credible people think could bring some relief on drug prices.”. “”.
Rand Corp. employee Andrew Mulcahy. The possibility of a 30 to 80 percent price reduction is a plausible part of Trump’s statement, according to a senior health economist.
Naturally, Mulcahy stated, “the details of policy design and implementation are where the problems lie.”. Rand’s research indicates that, “at first blush, a savings of roughly two-thirds on what we spend now for drugs seems in line.”.
What is the purpose of Trump’s executive order?
With reference to high U. S. drug prices, Trump claimed to Hannity that by signing the executive order, “I ended it.”. The order isn’t set up that way, though.
It is clear from the executive order that no action will be taken immediately.
In reference to Trump’s statement, Mulcahy remarked, “That ‘almost’ in ‘almost immediately’ is doing a lot of work.”.
Similar to what happened with Trump’s first term executive order, the executive order may also be challenged in court.
According to Antos, “it appears doubtful that the federal government can set prices for drugs outside of the Medicare program.”. To the benefit of all Americans, Trump should lower prices. A. Experts and consumers agreed that Congress would probably need to enact new laws instead of depending on an executive order. Experts stated that while executive orders give federal agencies instructions, legislation from Congress would probably be needed to force privately held companies to take action.
In addition to adding time, congressional involvement might attract resistance from the Republican majorities in one or both chambers. Federal price controls have historically been viewed negatively by many Republicans in Congress, according to Antos. “.”.
Our decision.
According to Trump, prescription drug prices will be lowered “almost immediately” as a result of his new executive order. “.”.
Experts predicted that price cuts would not occur “almost immediately” if the executive order’s objectives were met. “.”.
The order gives drugmakers 30 days to set pricing goals, after which there will be an indefinite period of time to determine whether the goals are met. If not, a formal rulemaking process would start, which could take months or even years. And if Trump wants to cut costs for everyone, not just those with government insurance like Medicare, Congress would probably need to enact legislation to accomplish this.
According to Trump, the cost of prescription medications will soon drop significantly for Americans. However, it might take months or years even if the executive order succeeds, which would be extremely unlikely.
There is some truth to the statement, but it ignores evidence that would suggest otherwise. We assign a Mostly False score.
