President Donald Trump recently signed an executive order aimed at lowering prescription drug prices. However, experts told KFF Health News the policy’s rollout reveals a slow, conditional path that hinges on drugmakers’ cooperation and potential future rulemaking.
Here are five notes:
- The executive order gives the administration 30 days to develop “most-favored nation” pricing targets, benchmarking U.S. drug prices to the lowest level comparable to other nations. If drugmakers do not voluntarily meet the targets, HHS is instructed to begin a rulemaking process that could take months or years, the news outlet reported May 20.
- Rather than mandating lower prices, the order counts on pharmaceutical companies to act unilaterally. Joseph Antos, PhD, a senior fellow emeritus in healthcare policy at the American Enterprise Institute, said the order “hopes that manufacturers will unilaterally lower U.S. prices. The legal authority to intervene in the market is unclear if this implausible scenario doesn’t happen.”
- To extend price reductions beyond federal programs, experts told the news outlet that congressional legislation would likely be required.
- HHS said May 20 it is taking steps to implement the order, including establishing pricing benchmarks and plans to publicly outline pharmaceutical manufacturers’ commitments. However, the department has not specified how enforcement will proceed if the benchmarks are ignored, the report said.
- President Trump’s suggested price drop of 30% to 80% aligns with research from the Rand Corp., a nonpartisan research organization, which found U.S. drug prices are around three to five times higher than in other developed countries.
