Trump plans to lower prescription drug costs

The Herald Scotland

14-05-2025

But some doubt how much consumers will feel the cuts. Pharmaceutical experts say the executive order will have no immediate impact on how much people pay at the pharmacy or for mail-order prescriptions. The president has asked the drug industry to voluntarily lower drug prices for U.S. consumer or be subject to a barrage of regulatory actions to force lower prices.
"The president thinks of pharmaceutical price differences between countries the same way he thinks of our trade imbalances with other countries," said John Barkett, managing director at the management consulting firm BRG and a former senior policy advisor in the Biden White House. "If we pay more than other countries, then he thinks we're getting ripped off."
How will the order lower drug prices?
The United States trade representative and the Department of Commerce have 30 days to give drugmakers price targets "to bring prices for American patients in line with comparably developed nations," the order said.
If they don't make significant progress toward those goals within six months, drugmakers could face actions from several federal agencies. The requested drug discounts could range for 59% to 80% from list prices.
Trump said other wealthy nations should pay more for prescription drugs. He called his executive order, which aims to charge Americans less and other nations more, "equalization."
If drugmakers that don't cut prices, the order directs Robert F. Kennedy Jr.'s Health and Human Services Department to draft federal rules to impose prices in line with other developed nations.
Trump's enforcement tool would come from federal regulators. Drug companies that fail to meet price targets could be investigated by the Federal Trade Commission for anti-competitive practices or face Food and Drug Administration reviews to "potentially modify or revoke" approvals of drugs found to be "unsafe, ineffective or improperly marketed."
The order also resurfaces an idea from the Trump administration's first term that achieved little uptake - importing less expensive pharmaceuticals from other nations.
Michael Cannon, director of health policy studies at the Cato Institute, said the threat of regulatory action from several federal agencies amounts to "throwing spaghetti against the wall."
"If they throw everything (at drug companies), they are more likely to get drug companies to do what they want," Cannon said.
How will these actions affect what I pay at the pharmacy counter?
The executive order will have "no immediate impact on the American consumer," Barkett said.
The amount consumers pay for prescription drugs depends on their health insurance plans, which often charge copayments or a percentage of the pharmacy bill. Prices also often include complex rebates hidden from public view.
Studies show consumers are feeling the pinch of higher drug prices. A 2023 survey by The Commonwealth Fund, a private foundation that focuses on access to health care, said nearly 2 in 5 people skipped or delayed medical care or didn't fill a prescription that year because they couldn't afford it.
Some Democrats are skeptical that the executive order will deliver meaningful drug price relief to consumers or taxpayers.
U.S. Rep. Lloyd Doggett, D-Texas, said Trump talks about lowering drug prices "but fails to accomplish anything."
"Rather than changing the law, Trump issues another press release that will offer consumers little or nothing," Doggett said. "Begging Big Pharma to show some benevolence to the taxpayers and consumers, whom they continue to price gouge, will do nothing to assure access to affordable medications."
How much more do US residents pay for prescription drugs?
Americans pay more for these life-saving medications than residents of other wealthy nations.
U.S prescription drug prices run more than 2.5 times those in 32 comparable countries, according to a 2023 HHS report. The U.S. spent $1,310 per person on prescription drugs, compared to $646 per person paid in other developed nations, the report said.
In January 2025, AARP Public Policy Institute examined average list prices on 25 drugs for which Medicare spent the most on but had not yet negotiated lower prices. The report found prices nearly doubled since they hit the market and collectively cost Medicare and taxpayers nearly $50 billion in 2022.
About 7 million older adults on Medicare used the drugs and had to pay a portion of the bill at the pharmacy or via mail order.
How does Trump's order compare to the Biden administration's efforts to lower drug prices?
Under Biden's 2022 climate and health legislation, the Inflation Reduction Act, Medicare was empowered to negotiate prices with pharmaceutical companies on a limited number of medications.
The law called for extensive rules, public comments and talks with drug companies before Medicare implemented discounts.
The Biden administration lowered prices on 10 widely prescribed drugs, such as the blood thinner Eliquis, which will take effect in 2026. In January, Medicare announced an additional batch of 15 drugs subject to negotiation for discounts beginning in 2027.
The law also called for penalties on drug companies that raised prices on prescription drugs faster than the rate of inflation.
What does the pharmaceutical industry think about Trump's order?
Stephen Ubl, president and CEO of the trade group Pharmaceutical Research and Manufacturers of America, or PhRMA, agreed with Trump's assessment that foreign countries are not paying their fair share.
Ubl also said pharmacy benefit managers, which negotiate drug prices on behalf of insurers and patients, also demand scrutiny.
"The administration is right to use trade negotiations to force foreign governments to pay their fair share for medicines," Ubl said. "U.S. patients should not foot the bill for global innovation."
But Ubl said U.S. pharmacy benefit managers, insurers and hospitals take half of every dollar spent on medicines.
"The amount going to middlemen often exceeds the price in Europe," Ubl said. "Giving this money directly to patients will lower their medicine costs and significantly reduce the gap with European prices."