Trump signs executive order to reduce the cost of some medications

President Donald Trump on Monday signed the order directing the U.S. Department of Health and Human Services to change the pricing model for some drugs. The move could tie what Medicare pays for medications to the lowest price paid by other economically advanced countries. Trump on Monday said foreign countries had benefited from low drug costs due to government regulations and negotiations with pharmaceutical companies, while Americans paid much higher prices for the same products. He said the new order would equalize the prices and officials would also look for ways to stop what he characterized as anti-competitive actions and price gouging. He did not specify which drugs would fall under the policy.

Has Trump attempted this before? Trump in late 2020 introduced the so-called Most Favored Nation Model. That plan also tied prescription drug prices to those paid internationally. The model was intended to last seven years beginning in January 2021 and the administration estimated it would have saved about $86 billion. The U.S. District Court for the Northern District of California in December of 2020 issued a nationwide injunction preventing the model from taking effect.

Dig deeper: Read Josh Schumacher’s report on the Biden administration’s proposal last year to lower the cost for obesity drugs.