President Donald Trump is poised to sign an extensive executive order on prescription drug costs, aimed at aligning U.S. prices with those in other countries. This new initiative is described as a more aggressive iteration of previous efforts during his first term, which faced legal challenges. The order tasks Health and Human Services Secretary Robert F. Kennedy Jr. with establishing price-cutting goals within 30 days, initiating negotiations with the drug industry. If discussions fail, the U.S. will implement a “most favored nation” model, capping prices based on the lowest rates from other wealthy nations.
Unlike the earlier plan that was limited to Medicare, this order includes Medicaid and private insurance medications. Specific drugs like GLP-1s, used for weight loss, are expected to be targeted for price reductions. The administration recently dismissed a proposal for Medicare to cover these drugs, sparking further debate about affordability.
Additionally, the FDA will explore the possibility of importing drugs from nations beyond Canada, while the Department of Justice and FTC will combat anti-competitive practices in the pharmaceutical sector. Trump has made bold claims about potential price reductions of up to 80%, though experts advise caution, citing legal uncertainties surrounding the measures and potential impacts on healthcare providers.
Concerns have also emerged that immediate price cuts could financially strain pharmacies and clinics, which often stock drugs at higher prices than those proposed. While Trump’s initiative claims to surpass previous efforts under President Biden, the feasibility and effectiveness of achieving these ambitious reductions remain uncertain. The Pharmaceutical Research and Manufacturers of America has criticized the approach, suggesting a focus on pharmacy benefit managers (PBMs) instead. This breaking news story is still developing, with updates expected soon.
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