President Donald Trump will sign an exhaustive executive order on Monday to cut costs for prescription drugs by getting the government to pay for certain drugs versus the prices paid by other countries.
Experts say the order is a more aggressive version Trump reimagined during his first term in office to cut drug costs, which failed to take effect after a federal judge lockdown.
Like the original policy, health policy experts expect it will meet a significant driving force in the pharmaceutical industry.
White House officials said on Monday the new order directed Secretary of Health and Human Services Robert F. Kennedy Jr. to propose a price cut target within 30 days. The move will hold a round of negotiations between Kennedy and the pharmaceutical industry.
If talks to booths, Kennedy will take action to implement the "favorite country" pricing model, capping the U.S. price at the lowest interest rate paid by other wealthy countries.
Most notably, officials said the policy will not be limited to certain drugs under Medicare, just like the original version, but will also target drugs covered by Medicaid and private insurance.
The government has not lowered specific categories of drugs, but officials said it is foreseeable that one class of drugs including Ozempic, Wegovy and Zepbough, including GLP-1. Last month, the administration rejected a Biden-era health insurance proposal for weight loss pills. The move would save patients money, but the government lost about $25 billion in 10 years.
Officials said the Food and Drug Administration will also consider expanding imports of prescription drugs from countries outside Canada, where prices are generally cheaper than in the United States.
"The president is very serious about the lower drug prices," an official said on the phone.
While the country accounts for less than 5% of the global population, prescription drugs are known to be high, officials said on Monday, but it accounts for nearly three-quarters of global drug profits. Rand Corporation is a public policy think tank that Americans pay 10 times more for drugs than people in other wealthy countries.
As experts support Trump's approach, they question how the administration will legally reduce the price of drugs under private insurance. They also fear its ability to withstand the legal impetus of the pharmaceutical industry.
"If this touches all the drugs for everyone, it's more ambitious, but the ripple effect is far from certain," said Tricia Neuman, executive director of Medicare policy at KFF, a health policy research group. "I hope the pharmaceutical industry can make all the legal arguments about this proposal."
Arthur Caplan, head of the medical ethics department at NYU Langone Medical Center in New York City, said the government may need to set more realistic expectations for the goals it achieves.
In Sunday’s Truth Society post, Trump claimed that prescription drugs will be reduced “almost immediately” by 30% to 80%, and that the United States “will pay the same price as the lowest priced nation in the world.”
In his follow-up post on Monday, Trump said drug prices would be reduced by 59%.
Kaplan said immediate relief would be great — but thinks the United States cannot reach the lowest price in the world.
"We won't get prices in South Africa, Peru, Egypt, Bolivia and Laos," Kaplan said. "Pharmaceutical companies usually offer discounts to poor countries on humanitarian grounds, and they won't give wealthy countries. Prices in the poorest countries don't have the chance to be the price paid by the Trump administration."
Stacie Dusetzina, a health policy professor at Vanderbilt University in Nashville, Tennessee, is concerned that the policy could harm doctors and pharmacies if the price is reduced immediately.
“For drugs managed by retail pharmacies or clinicians, they buy medications in advance to store shelves or allow them to treat patients,” she said. “The pharmacies or clinics that buy medications may be higher than the proposed new price, which means they will lose money when those drugs are filled.”
On Monday's call, an official appeared to clarify Trump's remarks on Sunday, saying drugmakers are expected to "reach the table soon" while the administration expects "actions" and "reliefs" to be soon.
Officials have not said how this will affect ongoing Medicare drug pricing negotiations, a legal policy signed by Joe Biden through the Lower Inflation Act.
In the last few days of the Biden administration, the Centers for Medicare and Medicaid Services announced the next round of price negotiations. It is estimated that the first round of negotiations will save $6 billion in 2026 when the price comes into effect.
But officials believe that lower prices achieved through the Biden administration are “inadequate” and that Trump’s new policy will achieve more aggressive price cuts.
"We will take action to go beyond what the Lower Inflation Act has achieved," one official said.
U.S. pharmaceutical research and manufacturer, a pharmaceutical industry trade group that filed a lawsuit against Trump's original policy, did not immediately respond to a request for comment.
The Trump administration should focus on so-called pharmacy welfare managers (PBMS) to address higher drug costs, the group spokesman Alex Schriver said in a statement last week.
PBM, also known as a middleman, works with insurance companies to negotiate discounted prices for pharmaceutical companies in exchange for inclusion of drugs within their coverage. In theory, PBMs should save money for patients, but they have been the target of U.S. lawmakers after government investigations accused them of exaggerating drug prices.
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