President Donald Trump plans to introduce an executive order aimed at reducing U.S. prescription drug prices by implementing a “most favored nation” pricing model for certain Medicare-covered medications. This approach ties U.S. prices to the lowest costs in other wealthy countries, such as Canada and Germany. The initiative, which Trump attempted in 2020 but faced legal challenges that halted its implementation, aims to address the significant disparity in drug prices, which can be up to ten times higher in the U.S. than in comparable nations, according to the Rand Corporation.
The new executive order is expected to specifically target Medicare Part B drugs, which are often administered in healthcare facilities, like chemotherapy medications. Though the plan could potentially save U.S. taxpayers over $85 billion, details remain unfinalized, and experts express skepticism about its longevity due to expected pushback from the pharmaceutical industry. Many health policy experts, including Arthur Caplan from NYU Langone Medical Center, support Trump’s approach, arguing there is no justification for the price discrepancies.
Public opinion is in favor of ensuring the U.S. pays prices similar to those in other countries, with over 75% of U.S. adults considering medications unaffordable. However, the pharmaceutical trade group is pushing back, suggesting that reforming pharmacy benefit managers would be more effective in lowering costs. Additionally, the Biden administration’s Inflation Reduction Act allows Medicare to negotiate prices on high-cost medications, a provision that is anticipated to save substantial amounts in the coming years. This dual approach to managing drug prices, according to experts, could effectively address the ongoing crisis of rising medication costs in the U.S.
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