Trump Drug Pricing Policy Risks US Innovation, Raises Global Costs
Trump Drug Pricing Policy Risks US Innovation, Raises Global Costs

Trump Drug Pricing Policy Risks US Innovation, Raises Global Costs

News summary

U.S. President Donald J. Trump's May 2025 Executive Order mandates that American drug prices not exceed the lowest prices in comparable developed nations, a move health economists warn could reduce domestic pharmaceutical innovation and negatively impact U.S. GDP due to decreased reinvestment in research and development. This policy, known as the 'Most-Favored-Nation' (MFN) pricing, risks disrupting global drug pricing models, potentially causing pharmaceutical companies to raise drug prices in Europe to offset revenue losses in the U.S., thereby stressing European public healthcare budgets. In Canada, experts caution that U.S. trade policies, including potential tariffs on pharmaceuticals, are contributing to fragile supply chains and could lead to shortages of essential medicines, posing significant health security risks. U.S. tariffs, although not yet imposed on drugs, have prompted insurance companies to anticipate higher premiums to cover increased pharmaceutical costs, which may further raise healthcare expenses domestically. The MFN policy and tariff threats highlight the broader impact of U.S. drug pricing reforms on international markets and healthcare systems, with concerns about supply chain stability, access to medicines, and rising costs across North America and Europe.

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