Former President Donald Trump’s latest executive order to curb drug prices is stirring the pot in Washington. As he revives a controversial plan to tie U.S. Medicare payments to global pricing benchmarks, the move is already drawing fire from pharmaceutical giants and dividing Republicans. Yet for millions of Americans drowning in medication costs, the debate hits close to home.
A Radical Promise to Rein In Drug Prices
The proposal, which is reigniting a long-simmering debate over drug prices in America, is the work of former President Donald Trump, who is pushing ahead with a plan that could change how Medicare pays for some medications. Before the ink on the executive order even dries, the pharmaceutical industry is already crying foul — cautioning of threats to innovation and access.
But for many Americans grappling with sky-high medical bills, Trump’s announcement seems like a belated recognition that something must be done.
Drugmakers Fire Back: “A Bad Deal for Patients”
Drug companies have pushed back in recent days by arguing that the approach would have unintended harmful consequences.
The pharmaceutical lobby pushed back hard and quickly before the formal signing. PhRMA, the industry’s most powerful lobbying group, called the plan a risky bet.
“Importing foreign price controls will do nothing to improve the sad state of the world’s least-valuable health care system,” said Stephen J. Ubl, the president and chief executive of PhRMA. “It undermines the hundreds of billions our member companies are investing in the United States, further reducing America’s self-reliance and increasing dependence on foreign countries, particularly China, for life-saving innovative medicines.”
It’s an old argument: If profits come down, there will be less money to invest in research, which will ultimately harm patients hoping for breakthrough cures. The industry is also worried that allowing foreign pricing to drive American policy could dampen innovation and allow foreign governments to exert too much influence over American health policy.
The Political Chessboard
This isn’t Trump’s first effort to reign in the pharmaceutical industry’s pricing power. In the waning days of his first term, he signed into law a similar executive order that centered on the “Most Favored Nation” approach as well. That version, however, was struck down by federal courts and eventually scrapped by the Biden administration.
Now, with a possible presidential comeback on the line, Trump once again is setting himself up as a defender of the American patient — not afraid to take on even the most powerful industries.
“It’s something that should have been done many years ago,” Trump told a recent event, noting that the pharmaceutical companies “are getting away with murder.”
Whether this is a sincere effort to reform or a political ploy is subject to debate. But there’s no question it’s a very effective way of garnering notice — for better and for worse — across pretty much the full political spectrum.
What the Executive Order Really Does
So what’s in the order? The details remain unclear, but the framework sounds something like Trump’s 2020 proposal. It aims at drugs that are given in doctors’ offices — things like chemotherapy infusions, injectables for rheumatoid arthritis and other high-cost treatments typically reimbursed under Medicare Part B.
The new pricing model would peg the price of these drugs to the lowest price among a selection of other rich nations paid for the same drugs. That, in turn, could sharply curb what Medicare pays — and what patients owe in copays and coinsurance.
But the vast majority of drugs — the kind you buy at your local pharmacy — are at little risk. Drugs in the Medicare Part D program — most drugs used on a day-to-day basis — are not included in this round of changes.
Afterward, that cap is a big sticking point for critics, who say for most Americans, the impact of the plan will be marginal at best.
A Cheap Fix or a Political Mirage?
Defenders of Trump’s policy say that even if the plan is narrow, the money involved is a lot. For Medicare Part B, drug spending exceeded $33 billion in 2021. Reducing some of those costs by however much, even halfway, could add up to billions of dollars saved, not just for the government but potentially for patients, too.
Trump has claimed that the modification will bring “TRILLIONS OF DOLLARS” in savings, but in truth, most experts believe that figure to be an exaggeration. Yet for a federal program the size of Medicare, even relatively small changes can make a big difference.
“Our Country will have finally a Real Healthcare, and that will happen immediately ” — Trump tweeted Wednesday.
Critics, however, are quick to point out the boundaries to such commitments. Because the plan aims at only a limited class of drugs, many seniors — particularly those who take standard medications for chronic health problems — may never notice a difference in their wallets.
Caught Between Americans
At the heart of this fight is a reality that nearly everyone can agree on: Prescription drug prices in the U.S. are too high. By many studies Americans pay more for medications than any other developed nation — often, significantly more.
Patients and families around the country are regularly forgoing doses, rationing prescriptions or going into debt to afford drugs that could save their lives. Political back-and-forth does little to comfort them.
“I’m on over $700 worth of medications a month,” says Louise, a retired schoolteacher in Ohio. “If the government can come up with a way to help us, I’m all for it — but it has to be actual help, not just talk.”
Patient advocacy groups agree with that sentiment, a number of which tentatively support any effort to lower prescription drug prices but are dubious whether Trump’s plan will make a meaningful dent for people who need it the most.
A Question of Innovation
A central argument of the pharmaceutical industry is that lowering prices will result in a reduction in research. The challenge in drug development is it’s very expensive and time consuming. The companies counter that if their revenue shrinks, their ability to pour money into developing groundbreaking new therapies will shrink as well.
But the oil industry’s critics are less sympathetic.
“They are crying wolf,” said Dr. Elena Perez, a healthcare policy analyst. “These are companies that are making record profits every single year. The notion that a little bit of pricing reform will kill innovation is bogus.”
Nevertheless, it’s a fine balance.” The U.S. has historically been the world leader in drug development, in part because companies can make so much money here. Changing that equation can lead to unpredictable ripple effects — both beneficial and harmful.
The Politicization of Healthcare Reform
Health has always been a political minefield, and Trump’s announcement comes as both Republicans and Democrats are feeling the pressure to show that they can actually deliver something to voters.
For Trump, the policy gives him a chance to separate himself from Biden and his Republican primary opponents. By going after the pharmaceutical lobby directly, he wants to position himself as a populist reformer — someone willing take on behalf of ordinary Americans against big corporate interests.
But critics caution that Trump’s record is more talk than action.
“He shoots from the hip a lot,” says Senator Rachel Kim (D-NY), “and there’s not much follow-through when it’s time to execute. We need more than orders from the executive branch – we need a long-term legislative solution.”
What Comes Next?
Trump is expected to sign the executive order at the White House, but it could be anything but smooth sailing afterward. Legal challenges are likely. The pharmaceutical industry is already gearing up to push back in the courts, as it did in 2020.
And the broader drug pricing overhaul still has Congress gridlocked. A bipartisan measure to cap the price of insulin and to let Medicare directly negotiate prices has languished, even though it is broadly popular with the public.
If Trump’s executive order does go through, however, its effect is more likely to be symbolic than transformative — an indicator for where the healthcare debate is taking us, rather than a fix-it-all, last-word solution.
Conclusion
Trump’s push to tie U.S. drug prices to those paid by other countries is a bold but controversial attempt to reshape America’s pharmaceutical policy. While it may offer savings on some high-cost Medicare treatments, critics warn of unintended consequences—from stifled innovation to deepened partisan rifts. Whether symbolic or significant, this move places drug pricing firmly in the spotlight ahead of the next election cycle.
FAQs
What does Trump’s drug pricing order aim to do?
It seeks to align U.S. Medicare prices with the lowest drug prices paid by other developed countries, targeting medications administered in doctors’ offices.
Will this affect all medications?
No, it primarily affects Medicare Part B drugs, not everyday prescriptions under Medicare Part D.
Why is the pharmaceutical industry opposed?
They argue it threatens innovation and investment by slashing profits and increasing reliance on foreign markets like China.
Will patients immediately see savings?
Savings may be limited and felt mainly by Medicare beneficiaries needing high-cost injectable drugs.
Could this executive order face legal challenges?
Yes. Like Trump’s previous similar order, this move is likely to be contested in court.
Reference
Pharmaceutical industry criticizes the drug pricing plan Trump will sign
