President Trump Overstates Speed and Certainty of Prescription Drug Price Cuts

In recent remarks, President Donald Trump claimed that an executive order would lead to an immediate reduction in prescription drug prices by 30% to 80%. While there was significant anticipation that such policy would lower costs, the official details of the executive order reveal a more complex and gradual process. Unveiled on May 12, the order aims to align U.S. drug prices more closely with those of other developed nations, particularly through establishing 'most-favored-nation' pricing targets.

Trump's statement suggesting near-instantaneous reductions was met with skepticism by experts, who explained that the executive order sets out a series of procedural steps. Within 30 days, administration officials must identify price targets to encourage drug manufacturers to lower prices for American consumers. After that, the government will monitor progress, and if significant improvements are not observed, then further regulatory actions—potentially including rulemaking—would be pursued, which can take months or even years.

Industry and health policy analysts emphasize that implementing such measures, especially those involving price controls outside Medicare, would likely require new legislation from Congress. Executing these policies swiftly and broadly faces legal and political hurdles, including court challenges and opposition from lawmakers wary of federal price controls.

Why do prescription drug prices in the United States tend to be much higher than in other countries? The answer lies in limited price negotiation powers, patent exclusivity practices, and greater marketing expenses. Most other industrialized nations effectively negotiate or regulate drug prices, often rejecting high-cost drugs, which helps keep prices lower.

While some argue that high prices fund medical research, recent studies suggest that the evidence for this is weak, as many new medicines offer limited additional benefit and companies spend more on marketing than on R&D.

The long-standing goal of policymakers from both parties has been to reduce drug costs. Legislation has been introduced to allow Medicare to negotiate prices, but significant reductions depend on broader legislative action and political will.

In conclusion, although President Trump predicts swift and substantial reductions in prescription drug costs, experts warn that the reality involves a prolonged process fraught with legal, legislative, and administrative challenges that will not result in immediate consumer savings.