Trump believes that this policy will "unprecedentedly" lower Medical Care costs in the USA, while the export price of American drugs will rise, leading to an increase in Global drug prices "to achieve balance." He stated that he will sign this executive order at 9 a.m. local time on Monday.
Trump has once again taken action against the Pharmaceutical Industry, announcing that drug prices will align with the lowest prices in the Global market.
On Sunday evening local time, Trump stated on Social Media that he plans to sign a significant executive order on Monday, mandating that prices for prescription drugs in the USA match those in countries with the lowest Global prices. Prescription drug and Pharmaceutical prices are expected to drop nearly 30% to 80% almost immediately, while Global drug prices will rise to achieve balance, bringing fairness to the USA for the first time in many years.
Currently, the specific details of the executive order have not been released, including key questions such as whether this policy applies only to government programs, if it is limited to specific categories of drugs, and the specific implementation mechanisms.
Following the announcement, the Japanese Pharmaceutical Index fell by 3.9% on Monday, becoming the largest declining Industry Index among the sub-indices on the Tokyo Stock Exchange.
The existing drug pricing system will be upended.
Trump believes that this policy will 'unprecedentedly' reduce the Medical Care costs in the USA.
For a long time, pharmaceutical companies have insisted that High Stock Prices are a necessary condition for driving innovation and developing new therapies, claiming that reforming this system would drastically cut revenue and stifle the development of breakthrough therapies that could extend and improve life.
In response, Trump rebutted that this means "the USA is paying without reason for these High Stock Prices," and he also predicted that in order to "balance and finally bring fairness to the USA," Global Pharmaceutical prices might rise, which could have a profound impact on the international pharmaceutical market.
Trump has long targeted USA Pharmaceutical prices.
Notably, this is not Trump's first attempt to reform USA Pharmaceutical prices.
During his first term, Trump proposed a Medicare pilot program aimed at drugs without low-cost generic competition used in doctors' offices, aiming to align prices with those in countries like France and Japan.
The plan was supposed to be phased in over three years, ensuring that prices paid by Medicare would not exceed the lowest prices offered by 22 countries. However, the plan was overturned in federal court because pharmaceutical companies challenged that the government did not properly execute the rule-making process.
The Biden administration did not appeal this ruling but instead pushed for legislation that eventually led to the passage of the Inflation Reduction Act.
In 2022, with the push from the Biden administration, the Inflation Reduction Act authorized the federal government to negotiate prices for the highest-cost drugs within the Medicare program and plans to increase the number of negotiated drugs each year. The first two rounds of price negotiations did not include prescription drugs from doctors, but the next round may include them.
Is Ackman the source of inspiration?
Billionaire hedge fund manager Bill Ackman hinted that Trump's actions may have been inspired by him.
In March of this year, Ackman tweeted on the X platform:
"The best way to lower drug prices in the USA is to legislate a ban on pharmaceutical companies selling the same drugs abroad at prices lower than those in the USA."
Editor/Lee
