On May 12, 2025, President Donald Trump signed a new executive order designed to lower prescription drug prices for Americans. The order introduces a "Most Favored Nation" policy, which ties the prices of certain medications in the U.S. to the lowest prices paid by other developed nations. This initiative seeks to address the long-standing issue of Americans paying higher prices for the same drugs compared to other countries.
The executive order empowers the Department of Health and Human Services to negotiate drug prices and, if necessary, implement pricing rules to ensure that U.S. prices are not higher than those in comparable countries. Additionally, the policy aims to reduce the role of intermediaries, such as pharmacy benefit managers, in the drug pricing system, potentially allowing for more direct-to-consumer sales from drug manufacturers at lower prices.
While the administration projects significant savings for American consumers, the pharmaceutical industry has expressed concerns that such pricing policies could impact innovation and investment in drug research and development.
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