US President Donald Trump announced yesterday that he will sign an executive order to slash drug prices in the US by a steep rate.
The executive order aims to ensure that Americans pay drug prices equivalent to the cheapest countries in the world, a move that is expected to shake up the pharmaceutical industry.
Trump said he would implement the ‘Most Favored Nation’ policy, which he said could reduce drug prices by between 30% and 80%, especially for drugs given in hospitals or clinics such as cancer treatments.
The move would target drugs under Medicare Part B and is expected to save the government billions of dollars.
This is not the first time Trump has proposed this idea – a similar effort was tried in 2020 but was blocked by the courts.
But this time, Trump is back with the effort, emphasizing his election promise, saying that America pays the highest drug prices in the world, while the people are the victims and pharmaceutical companies continue to make huge profits on the pretext of R&D costs.
The pharmaceutical industry has already begun to warn that government price-setting could stifle innovation and the development of new drugs.
However, Trump has stuck to his decision to proceed with this move, despite a multi-million dollar campaign trying to stop him.
