WASHINGTON — President Trump released an executive order Sunday that would drastically cut how much Medicare pays for virtually all of the drugs seniors take — the boldest move yet he’s taken to lower drug prices since taking office.

The policy vastly expands an older, controversial drug pricing policy that Trump has been teasing for months. Effectively, it will force drug makers to offer their medicines to Medicare at the same prices they do in other countries, as a so-called most favored nations policy. Where an earlier version would only have applied to Part B drugs, which are administered in doctors offices, the new version also applies to Part D drugs, which are sold in pharmacies.

The move could cost the drug industry billions and dramatically cut drug prices for most seniors. However, it’s unclear if Trump can implement the policy before the end of his first term. The Trump administration still hasn’t released formal regulations to implement the policy. That process typically takes months, if not years.


Sunday’s shocking move is also a sign of renewed tensions between the drug industry and the White House. The Trump administration had previously given the drug industry an ultimatum. Trump promised to not implement the most-favored nations policy if drug makers came up with alternative policies. But the Sunday release is a resoundingly clear sign that those negotiations have fallen apart.

The drug industry has also hinted it will sue to block the policy from being implemented — and that was before the industry saw the new, expanded version.


By issuing the new executive order, Trump is directing his health secretary to implement a policy whereby Medicare would not pay more than the lowest price for a drug that is offered in countries with comparable gross domestic product. It’s unclear, however, if the policy will be permanent: The executive orders direct the HHS secretary to test the ideas before making them permanent.

It’s still unclear when the Trump administration will formally implement the new executive order. Drug industry lobbyists expect Trump to try and skip over most of the formal regulatory steps by issuing a so-called interim final rule, a rare regulatory maneuver that lets president’s skip most of the formal regulatory steps in certain emergencies. However, the drug industry has hinted it will sue if Trump tries to use that maneuver.

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  • There is a cancer within the whole drug pricing problem. This cancer that want’s things to stay the same is PCMA
    and the PBM’s. Why doesn’t our legislators see how many billions of dollars this country would save if the PBM’s
    didn’t take their vig? Or the extortion money that the PBM’s collect for “proper placement on a drug formulary”.
    This by the way is what PCMA defines drug rebate money as. Total transparency is what is needed. Until the PBM’s
    are governed to adhere to fair and equal laws for all, the price of drugs in this country will never be controlled.

    You go to a doctor, he prescribes the medication he feels will best treat your illness. You then go to get it filled at the pharmacy and your told that the drug isn’t covered. Why the hell not !! Well the PBM’s aren’t getting their payoff.
    So your told that this drug or that drug is covered, but that drug is 5x the price !! So you tell me, who is practicing
    medicine in this country?????

  • Global drug pricing is the poster child for how a product should NOT be priced. It’s been so screwed up for so long, no executive order is going to fix it.

    Price fixing is so widespread, and so entrenched, it may never get unraveled.

    The American consumer — and it’s healthy consumer by and large — basically subsidizes pharmaceutical research for the rest of the globe. Meanwhile, the Euro nations, with their socialized health care, hold the drug companies hostage and say, “here is what we will pay, otherwise, forget it.” The Pharma industry shrugs its shoulders and goes along.

    Third world nations are poor, and so for combination purposes of Public Relations and arguably appropriately humanitarian concerns, they get stuff for next to nothing.

    Medicare, OUR version of socialized medicine, says, “here is what we will pay, otherwise, forget it.” The Pharma industry shrugs its shoulders and goes along.

    So after this game of pricing musical chairs, the American insurance industry, which funds most of health care in this nation, dicks around and will pay for this treatment here, but not that treatment there.

    To truly fix this problem, you would have to get governments — ALL governments — out of the health care/drug pricing business. Moreover, you would need to have extended patent protection so pharma businesses — and they are BUSINESSES, alas — can maintain ownership of easily replicated products, which most drugs are.

    But it will never happen because, you know, “health care is a human right.”

    Economists like to talk about “frictionless markets.” The market for drugs is so full of friction that it’s a wonder we get new drugs at all.

  • one sided bias article with zero data ; in year 2018 UC citizens spent 365 BILLION on drugs or 3 to 5 x what any other country spends on drugs per capita ; furthermore the VA spends 70 % less on the same drugs that Medicare participants pay for drugs with many on fixed incomes and can not afford even the copays ; drug prices have risen faster than inflation for 40 years ; finally the proposed Big Pharma 100 billion in savings over 10 years is less than 3% per year so if they raise them 4% the savings are nullified ; all facts

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