By Dr. Brian C. Joondeph | Commentary, American Thinker
Last week, President Donald Trump grabbed his Sharpie and signed an executive order to tackle the sky-high prescription drug prices in the U.S. The plan? A “Most Favored Nation” (MFN) pricing model that aligns U.S. drug costs with those of other countries.
Sound familiar? Trump tried this during his first term, but the courts rejected it, and Biden hit the ‘undo’ button.
Here’s the lowdown on why Trump is back at it, what’s at stake, and whether this bold move will stick.
Trump has promised cheaper drugs since his campaign days, alongside crowd-pleasers like building the wall and draining the swamp. Americans are fed up, paying nearly three times more for medications than people in other wealthy countries.
With the U.S. covering 75% of global pharma profits despite representing only 5% of the world’s population, Trump labels it as “subsidizing socialism abroad” while we get “gouged” at home.
Ouch.
This isn’t a new idea. Trump’s 2020 MFN rule for Medicare Part B drugs was blocked by courts for skipping proper steps and was canceled by Biden in 2021. The 2025 version is larger, covering Medicare, Medicaid, and possibly even private markets.
It tasks the Health and Human Services (HHS), led by Big Pharma skeptic Robert F. Kennedy, Jr., with setting price targets within 30 days. If there is noncompliance, HHS will increase pressure with MFN pricing or “aggressive measures,” a variant of Trump’s FAFO policy.
Additionally, there is discussion about direct-to-consumer drug purchases, increased drug importation, and addressing unscrupulous industry practices.
Why now? Polls indicate that 74% of Americans cannot afford their medications, and Trump faces pressure to reduce inflation and health care costs.
Appointing Kennedy and Dr. Mehmet Oz to lead CMS screams, “we’re taking on Big Pharma!” It also serves as a jab at Biden’s Inflation Reduction Act, which cut prices on 10 drugs but left them 78% higher than abroad.
So, what are the positives, negatives, and potential “oops” of this plan?
The Upside: Cheaper drugs would be a game-changer, especially for seniors and low-income individuals. AARP’s cheering, calling out “rip-off” pricing. Matching global prices addresses the unfairness of Americans financing other countries’ healthcare. Targeting middlemen like pharmacy benefit managers and promoting generics, biosimilars, and imports could shake up the market. Plus, it’s a MAGA crowd-pleaser, boosting Trump’s street cred and GOP prospects in next year’s midterm elections.
The Downside: Pharma giants warn that cutting profits could undermine R&D, slowing the development of new drugs. PhRMA predicts a $1 trillion loss over a decade if Medicaid is included. The order’s unclear legal basis, particularly in private markets, invites lawsuits — 2020 déjà vu. Drugmakers might abandon foreign markets or raise prices abroad, creating trade drama. And setting targets within 30 days? That’s a tall order, though if anyone can hustle, it’s Team Trump.
Oops Moments: If drugmakers focus on profitable markets or halt the production of low-margin drugs, we may face shortages. Europe could see rising medication costs, resulting in trade disputes. Hospitals and physicians might raise other fees to offset losses, indirectly affecting patients’ finances.
Relying on imported drugs raises worries about the supply chain, which heightens national security concerns regarding potential critical drug shortages. If savings do not materialize quickly or if innovation stalls, Congress and voters may withdraw their support, leaving Trump’s plan unviable. It is important to note that Congress has, thus far, failed to codify any of Trump’s executive orders into law.
As lowering prescription drug prices enjoys bipartisan support, it may actually pass Congress. Two Democrats, Ro Khanna and Bernie Sanders, “support voting Trump’s drug price order into law.”
We shall see which members of Congress are serious versus those who follow their Big Pharma paymasters.