President Donald Trump signed an executive order on Monday to reduce drug prices in America to rates similar to what those in other nations pay.
Trump signed the order during a press conference in the Roosevelt Room flanked by Health and Human Services Secretary Robert F. Kennedy, Centers for Medicare and Medicaid Services Administrator Dr. Mehmet Oz, National Institutes of Health Director Dr. Jay Bhattacharya, and Food and Drug Commissioner Dr. Marty Makary.
“Starting today, the United States will no longer subsidize the health care of foreign countries, which is what we were doing,” Trump said during the executive order signing.
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“We were subsidizing others’ health care–countries where they paid a small fraction for the same drug that what we pay many, many times more for, and we’ll no longer tolerate profiteering and price gouging from Big Pharma,” he continued, adding that it was actually other countries that “forced” pharmaceutical companies into the situation.
A White House fact sheet notes that the order directs Commerce Secretary Howard Lutnick and U.S. Trade Representative Jameson Greer “to ensure foreign countries are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the United States.”
Moreover, officials will communicate target prices to pharmaceutical producers to garner “the best deal” for America.
The order also aims to establish a vehicle allowing Americans to purchase drugs at “Most Favored Nation” prices from producers directly.
It further empowers Kennedy to take action if manufacturers do not set prices at a most-favored-nation level, per the fact sheet:
If drug manufacturers fail to offer most-favored-nation pricing, the Order directs the Secretary of Health and Human Services to: (1) propose rules that impose most-favored-nation pricing; and (2) take other aggressive measures to significantly reduce the cost of prescription drugs to the American consumer and end anticompetitive practices.
Trump predicted prices would come down “between 59 and 80, and I guess even 90 percent.”
Trump said that, as things currently stand, pharmaceutical companies make over two-thirds of their profits in the United States, which accounts for only four percent of the world’s population.
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