(May 12, 2022) - President Donald Trump signed an executive order this morning that aims to reduce the costs of drugs by tying the prices of some medications in the United States to the significantly lower prices of drugs abroad.
This policy, often called the “most favored nation” policy, instructs federal agencies over the next 30 days to communicate most-favored-nation price targets to pharmaceutical manufacturers to bring prices for American patients in line with comparably developed nations.
In addition to the instructions for this new drug price reduction policy, enforcement actions are described, including cracking down on global price discrimination.
While specific drugs are not listed in the order, President Trump has stated this will impact the commercial market in addition to Medicare and Medicaid and focus on the drugs that have the largest disparities and largest expenditures.
The implementation and execution of this order is likely to evolve in the coming weeks and may face lawsuits challenging its implementation.