Trump Plans Executive Order Linking US Drug Prices to Lowest Global Rates

President Donald Trump is set to sign an executive order aimed at significantly reducing prescription drug prices in the United States by aligning Medicare payments with the lowest prices paid by other countries, a move that could cut costs by 30-80%. Trump announced this 'most favored nation' policy on social media, emphasizing that Americans will finally be treated fairly and projecting government savings in the trillions, although actual savings remain uncertain. The plan primarily targets drugs administered in healthcare settings covered by Medicare, such as cancer treatments, affecting approximately 70 million older Americans. The pharmaceutical sector reacted negatively to the announcement, with global drug stocks and Asian pharma companies, particularly those with high exposure to the U.S. market like Indian and Japanese firms, experiencing notable declines. This initiative contrasts with President Joe Biden's Inflation Reduction Act, which allows government negotiation of drug prices but still results in higher U.S. prices compared to other developed nations. Despite the broad ambition and market impact, specific implementation details of Trump's executive order have yet to be disclosed.