Under a new executive order, prescription drug prices will be reduced \u201calmost immediately.\u201d<\/p>\n
President Donald Trump, in a May 11 post on Truth Social<\/p>\n
\nPresident Donald Trump expressed high hopes for an executive order to reduce drug prices.<\/p>\n
On May 11, the day before he held a White House event to sign the executive order, Trump posted on Truth Social, \u201cPrescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%.\u201d<\/p>\n
However, the\u00a0executive order\u2019s text<\/a>,\u00a0unveiled May 12, undercut the president\u2019s description of how soon consumers could experience this potential boon.<\/p>\n The idea of the executive order, he said, was to lower high prescription drug costs in the U.S. to levels more typical in other countries.<\/p>\n \u201cWe\u2019re going to equalize,\u201d Trump said at the order signing. \u201cWe\u2019re all going to pay the same. We\u2019re going to pay what Europe\u2019s going to pay.\u201d<\/p>\n Experts said Trump\u2019s action could lower the cost of prescription drugs, perhaps by the 30% to 80% Trump said, but they cautioned that the order\u2019s required procedural steps would make it far from an immediate fix.<\/p>\n The\u00a0executive order\u00a0says that within 30 days, administration officials must determine and communicate to drugmakers \u201cmost-favored-nation price targets,\u201d to push the companies to \u201cbring prices for American patients in line with comparably developed nations.\u201d<\/p>\n After an unspecified period of time, the administration will gauge whether \u201csignificant progress\u201d toward lower pricing has been achieved. If not, the order requires the secretary of Health and Human Services to \u201cpropose a rulemaking plan to impose most-favored-nation pricing,\u201d which could take months or years to take effect.<\/p>\n \u201cExecutive orders are wish lists,\u201d said Joseph Antos, a senior fellow emeritus in health care policy at the conservative American Enterprise Institute. The order \u201chopes that manufacturers will unilaterally lower U.S. prices. The legal authority to intervene in the market is unclear if this implausible scenario doesn\u2019t happen.\u201d<\/p>\n When contacted for comment, the White House did not provide evidence that the executive order would provide immediate results.<\/p>\n Why Do Americans Pay More for Prescriptions?<\/strong><\/p>\n There is wide\u00a0agreement<\/a>\u00a0that drug prices are unusually high in the U.S. The prices Americans pay for pharmaceuticals are nearly three times the average among a group of other industrialized countries in the Organization for Economic Cooperation and Development.<\/p>\n A\u00a0study\u00a0by the Rand Corp.<\/a>, a nonpartisan research organization, found that, across all drugs, U.S. prices were 2.78 times as high as the average prices across 33 OECD countries. The gap was even wider for brand-name drugs, with U.S. prices averaging 4.22 times as much.<\/p>\n The U.S. has lower prices than comparable nations for unbranded, generic drugs, which account for about 90% of filled prescriptions in the U.S. But generics account for only a fifth of U.S. prescription drug spending.<\/p>\n Experts cite several reasons for this pricing discrepancy.<\/p>\n One is that the U.S. has more limited price negotiation with drug manufacturers than\u00a0other countries<\/a>\u00a0do. Often, if another country fails to find the extra cost of a new drug is justified by improved results, it\u2019ll reject the drug application. Some countries also set\u00a0price controls<\/a>.<\/p>\n Another factor is patent exclusivity. Over the years, U.S. pharmaceutical companies have used strong legal protections to amass patents that can keep generic competitors from the marketplace.Drug companies have also argued that high prices help pay for research and development of new and improved pharmaceuticals. When Trump released the executive order, Stephen J. Ubl, president and CEO of the drug industry group Pharmaceutical Research and Manufacturers of America, said in a\u00a0statement<\/a>, \u201cIt would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America.\u201d (In Trump\u2019s May 13 interview with Fox News\u2019 Sean Hannity, Trump offered a different picture of what drug company officials have told him; he said they agreed \u201cit\u2019s time\u201d to lower U.S. prices.)<\/p>\n Recent studies have cast doubt on the idea that high prices pay for research and development. A\u00a02023 study<\/a>\u00a0found that from 1999 to 2018, the world\u2019s 15 largest biopharmaceutical companies spent more on selling and general administrative activities, which include marketing, than on research and development. The study also said most new medicines developed during this period offered little to no clinical benefit over existing treatments.<\/p>\n The long-standing reality of high U.S. drug prices has driven Democratic and Republican efforts to bring them down. Then-President Joe Biden signed legislation to require Medicare, the federal health care program that covers Americans over 65, to\u00a0negotiate prices<\/a>\u00a0with the makers of some popular, high-cost medicines. And Sen. Bernie Sanders (I-Vt.) has made lowering drug prices a\u00a0cornerstone issue<\/a>\u00a0during his political career.<\/p>\n During his first term, Trump sought to lower prices for certain drugs under Medicare, but the courts\u00a0blocked\u00a0the move<\/a> on procedural grounds.<\/p>\n Trump\u2019s drug-price push could attract bipartisan support, experts said.<\/p>\n Jonathan Cohn, who has worked for several left-of-center media outlets and wrote<\/a>\u00a0two\u00a0books<\/a>\u00a0on health care policy,\u00a0offered\u00a0measured praise<\/a> for Trump\u2019s executive order in The Bulwark, a publication generally critical of Trump, calling it \u201ca serious policy initiative, one that credible people think could bring some relief on drug prices.\u201d<\/p>\n Andrew Mulcahy, a Rand Corp. senior health economist, said one part of Trump\u2019s statement \u2014 the possibility of a 30% to 80% price reduction \u2014 is plausible.<\/p>\n \u201cOf course, the devil\u2019s in the policy design and implementation details,\u201d Mulcahy said. \u201cBut at first blush, a savings of roughly two-thirds on what we spend now for drugs seems in line\u201d with what Rand\u2019s research has shown.<\/p>\n What Would Trump\u2019s Executive Order Do?<\/strong><\/p>\n Referring to high U.S. drug prices, Trump told Hannity that \u201cI ended it\u201d by issuing the executive order. But that\u2019s not how the order is structured.<\/p>\n The executive order makes plain that any actions will not happen quickly.<\/p>\n \u201cThat \u2018almost\u2019 in \u2018almost immediately\u2019 is doing a lot of work,\u201d Mulcahy said, referring to Trump\u2019s statement.<\/p>\n The executive order also could face court challenges, just as Trump\u2019s first-term executive order did.<\/p>\n \u201cIt seems unlikely that the federal government can set prices for drugs outside of the Medicare program,\u201d Antos said. If Trump wants reduced prices to benefit all U.S. consumers, experts said, Congress will likely have to pass new legislation. While executive orders direct federal agencies what to do, requiring action from privately owned companies likely would require legislation passed by Congress, experts said.<\/p>\n If Congress gets involved, that will not only tack on extra time, but it also could draw opposition from the Republican majority in one or both chambers. Historically, Antos said, \u201cfederal price controls are anathema for many Republicans in Congress.\u201d<\/p>\n Our Ruling<\/strong><\/p>\n Trump said that, because of his new executive order, prescription drug prices would be reduced \u201calmost immediately.\u201d<\/p>\n Experts said that if the goals of the executive order are achieved, price reductions would not happen \u201calmost immediately.\u201d<\/p>\n The order sets out a 30-day period to develop pricing targets for drugmakers, followed by an unspecified amount of time to see if companies achieve the targets. If they don\u2019t, a formal rulemaking process would begin, requiring months or even years. And if Trump intends to lower prices for all consumers, not only those who have federal coverage such as Medicare, Congress will likely have to pass a law to do it.<\/p>\n Trump gives the impression that Americans will shortly see steep decreases in what they pay for prescription drugs. But even if the executive order acts as intended \u2014 which would require a lot to go right \u2014 it could take months or years.<\/p>\n The statement contains an element of truth but ignores evidence that would give a different impression. We rate it Mostly False.<\/p>\n Donald Trump, Truth Social\u00a0post<\/a>, May 11, 2025<\/p>\n White House, \u201cDelivering Most-Favored-Nation Prescription Drug Pricing to American Patients<\/a>,\u201d\u00a0May 12, 2025<\/p>\n Rand Corp., \u201cInternational Prescription Drug Price Comparisons: Estimates Using 2022 Data<\/a>,\u201d February 2024<\/p>\n Government Accountability Office, \u201cU.S. Prices for Selected Brand Drugs Were Higher on Average Than Prices in Australia, Canada, and France<\/a>,\u201d March 2021<\/p>\n The BMJ, \u201cHigh Drug Prices Are Not Justified by Industry\u2019s Spending on Research and Development<\/a>,\u201d Feb. 15, 2023<\/p>\n Pharmaceutical Research and Manufacturers of America, \u201cPhRMA Statement on Most Favored Nation Executive Order<\/a>,\u201d May 12, 2025<\/p>\n USA Today, \u201cRFK Jr. Spars With Bernie Sanders Over Who Did Most To Curb Prescription Drug Prices<\/a>,\u201d May 12, 2025<\/p>\n The Associated Press, \u201cTrump Plan To Curb Drug Costs Dealt Setback in Court<\/a>,\u201d Dec. 23, 2020<\/p>\n The Associated Press, \u201cWhite House Says Prescription Drug Deals Will Produce Billions in Savings for Taxpayers, Seniors<\/a>,\u201d Aug. 15, 2024<\/p>\n PolitiFact, \u201cFor the Most Part, the US Pays Double for Prescriptions Compared With Other Countries, as Biden Says<\/a>,\u201d March 4, 2024<\/p>\n Email interview with Joseph Antos, senior fellow emeritus in health care policy at the American Enterprise Institute, May 12, 2025<\/p>\n Email interview with Andrew Mulcahy, senior health economist with Rand Corp., May 12, 2025<\/p>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. 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