On Sunday, President Donald Trump declared that he intends to reinstate a contentious program from his first term that targets prescription cost reduction.
By basing payments for certain medications on their prices in other nations.
His previous law, known as “Most Favored Nation,” was finalized in late 2020 but was revoked by then-President Joe Biden in 2021 after being halted by federal courts.
Medicare payments for some medications given in doctor’s offices would have been affected. It’s unclear, though, which medications or payments the new directive will cover.
Trump said he intends to execute an executive order Monday morning that he claims would significantly reduce prescription prices in a post on Truth Social on Sunday night.
“I’m going to sign one of the most important executive orders in the history of our nation. Prices for pharmaceuticals and prescription drugs will be lowered by 30% to 80% practically instantly,” he stated.
“A MOST FAVORED NATION’S POLICY, which I will be implementing, will ensure that the United States pays the same price as the nation that pays the lowest price globally.”
During the president’s first term, pharmaceutical imports were excluded from such taxes, but the Trump administration is now attempting to levy duties on them.
Prices may eventually rise as a result of the tariffs, which may worsen shortages of some medications, especially generic ones.
Medicare and its beneficiaries may save money if the new presidential order is similar to the 2020 regulation.
However, experts warned that it might also restrict patients’ access to prescription drugs. The structure of the policy determines a lot.
Trump’s assertion that his most recent initiative would significantly lower prescription costs was refuted by at least one health care policy researcher.
Chris Meekins, a Raymond James analyst, wrote in a note to clients Sunday night, “Trump has a long history in his first term of talking bigger on drug pricing than what his policies would actually do.”
“Trump’s proposed executive actions are less likely to be carried out the more extravagant they are, as successful court challenges will be far more likely.”
Trump has not made as big of a point of cutting medicine prices this term as he did during his first administration.
Additionally, his team informed Politico last year that he had abandoned the “Most Favored Nation” approach, which is vehemently opposed by many Republicans.
However, in the House GOP’s comprehensive tax and spending reduction proposal, the administration has brought the idea back to life as a possible means of meeting Medicaid’s steep spending cut targets.
It’s unclear, though, if the executive order will cover the plan or if it will be part of the legislation, the specifics of which should be revealed soon.
The pharmaceutical sector, which was successful in stopping the earlier version, is likely to oppose the proposal with vigor.
For American patients, this Foreign First Pricing plan is a lousy value. In a statement, Stephen Ubl, CEO of PhRMA, the primary trade association for the industry, said.
“Importing foreign prices will cut billions of dollars from Medicare with no guarantee that it helps patients or improves their access to medicines.”
“It puts at risk the hundreds of billions of dollars that our member companies intend to invest in America, increasing our dependence on China for cutting-edge medications.”
In 2018, the Trump administration proposed linking Medicare’s prescription reimbursements to international pricing, and shortly after the 2020 election, the rule was implemented.
The seven-year approach would have given the US the opportunity to benefit from bargains made by other peer nations.
Who generally pay much less for pharmaceuticals due in large part to the fact that their governments frequently set the price.
Medicare would have covered the lowest cost of 50 Part B medications given in doctor’s offices among those peer nations under the 2020 proposal.
An estimated $86 billion would have been saved, according to the administration.
In 2022, the Democrats passed the Inflation Reduction Act, which gave Medicare the historic authority to negotiate drug costs for a limited selection of medications each year.
Prior to that, Medicare was prohibited from doing so.
According to experts, a “Most Favored Nation” concept might help beneficiaries save money on both their premiums and out-of-pocket expenses, which are impacted by the cost of medications.