Trump's executive order to lower drug prices may not do much of that

The White House's executive order to lower drug prices is largely an exercise in applying leverage, rather than actual policymaking — and it may not amount to much, experts said.The big picture: President Trump says his directive will dramatically reduce drug costs for U.S. consumers, and quickly. But there are few details as to how he plans to accomplish that. Instead, Trump appears to be adapting the playbook he's used on universities over Gaza protests: Threaten administrative actions that could be financially painful, set a deadline — in this case 30 days — and then see what happens. "It reminds us of how in President Trump's first term he was 'all bark, no bite' on drug pricing," Chris Meekins, an analyst at Raymond James, wrote in an investor note Monday."We don't completely discount the possibility that the EO could eventually lead to some one-off deals, but the order itself is so vague that it's difficult to predict the exact impact it may have," Capital Alpha's Kim Monk wrote in a note.State of play: The order calls for drugmakers to voluntarily cut prices or face the threat of a "Most Favored Nation" pricing regime that would peg the cost of their medicines to what's paid in other wealthy nations, where they often sell for less.The timeline for the administration to actually secure lower drug prices is slippery. Trump posted on social media Sunday that American consumers would "almost immediately" see their drug prices fall by 30% to 80%.In reality, it would take much longer than that. The executive order gives administration officials 30 days to come up with new target drug prices and to communicate them to companies. If the companies don't agree to lower prices voluntarily, HHS will kick off a rulemaking process and other enforcement actions — all of which take considerable amounts of time.That includes actions such as certifying drug importations from other developed nations, increased anti-trust enforcement and the potential modification or loss of drug approvals.Yes, but: The order is almost certain to be challenged in court, just like a similar most favored nation policy for Medicare was during Trump's first term. "If people thought Harvard was well capitalized enough to fight back against Trump's lawsuits, wait until they see the drug industry," John Barkett, managing director at BRG and former senior policy advisor in the Biden White House.Trump's 2020 attempt to tie Medicare Part B drugs to the lowest price paid by other OECD countries was blocked by a federal judge after the drug industry sued. This time, the administration may be hampered by last year's Supreme Court decision that struck down the so-called Chevron deference and could limit executive branch agencies' ability to compel drugmakers to cut prices without action from Congress.Trump said during a press conference Monday that he spoke to the Republican leaders of the Senate and the House of Representatives about passing legislation to lower drug prices. But government price negotiation has historically been very unpopular with Republican lawmakers. Between the lines: The EO also calls for pushing other countries to increase what they pay for drugs to share the costs for biomedical innovation.It is unclear how the U.S. intends to push other countries to do that, although the economics would suggest that pushing prices down in the U.S. could drive up prices elsewhere, Yunan Ji, assistant professor of strategy in the business of health initiative at Georgetown's McDonough School of Business.Most favored nation pricing generally works better for smaller economies, Ji said. "When a really large economy factors prices against some smaller economies, that's going to affect the whole global equilibrium," Ji said. "So it's not certain that the US will actually save money. It could but it's going to set off a whole lot of reshuffling because the European contracts will have to be renegotiated."Reality check: The pharmaceutical industry doesn't seem excessively worried."The Administration is right to use trade negotiations to force foreign governments to pay their fair share for medicines. U.S. patients should not foot the bill for global innovation," PhRMA CEO and president Stephen Ubl said in a statement. Still, industry leaders warned against the dangers of "importing foreign price controls."The intrigue: Given all the uncertainty, some are speculating the order may do little more than distract from the grinding Medicaid debate in Congress. "At the end of the day, was this just a distraction to try to get reporters not to focus on GOP efforts to cut Medicaid? That is probably as good of an explanation as any," Raymond James' Meekins wrote.

Comments

World news

Express

The real reason 'lying' Vladimir Putin will not end his war in Ukraine revealed

about 1 hour ago

Express

Ukraine LIVE: Russia explodes over 'unacceptable' EU ultimatum - ceasefire deal on brink

about 1 hour ago

Independent

Sean Duffy blames Biden for Newark airport crisis, but also says it should’ve been fixed during Covid — when Trump was in office

about 1 hour ago

China presents a united front with Latin America, aiming to counter Trump's trade war

Independent

‘Environment of fear’: Popular US leftist Twitch streamer Hasan Piker says he was grilled about Trump by Customs agents at Chicago airport

about 7 hours ago

Baby oil, domestic violence and a male escort: Graphic testimony emphasizes the reality of the accusations Diddy faces

Independent

Comments

Similar News

Two Trump appointees escorted out of Library of Congress amid White House takeover, report says

Leftwing pundit Hasan Piker says US border agents quizzed him on Trump and Gaza

Trump's US drug prices order: what is Most Favoured Nation status?

How Trump may lean on personal ties with Gulf Arab leaders while in the Middle East

Zelenskyy urges Trump to join peace talks with Putin in Turkey

Canadians’ Trump-inspired US travel boycott intensified in April with further drops in car and plane trips

Trump wants to come back from Middle East with $1 trillion worth of investment into US

First group of white South Africans arrive in US after Trump grants refugee status

First group of white South Africans lands in U.S. under Trump refugee plan

Trump’s tariffs have already failed at their main job

Trump Mistakenly Thinks Japan Is a Soft Target

How Trump Can Reset His Failed Ukraine Policy

Tuesday Briefing: Trump’s Visit to the Gulf

Vivian Bercovici: Hostage release the one bright spot in Trump’s dangerous diplomacy

U.S. and China call 90-day truce in trade war but Trump warns higher tariffs could return

Donald Trump dealt major blow as US president 'less popular than Putin and Xi Jinping'

Trump puts white South Africans on citizenship fast track while rejecting all other refugees: ‘As subtle as an air raid’

Trump supporter and green card holder detained for over a month by ICE over years-old marijuana charge

What Trump’s dream ‘Golden Dome’ could look like

Brazil’s president seeks ‘indestructible’ links with China amid Trump trade war

World news

The real reason 'lying' Vladimir Putin will not end his war in Ukraine revealed

Ukraine LIVE: Russia explodes over 'unacceptable' EU ultimatum - ceasefire deal on brink

Sean Duffy blames Biden for Newark airport crisis, but also says it should’ve been fixed during Covid — when Trump was in office

China presents a united front with Latin America, aiming to counter Trump's trade war

World trade chief says global free trade is in a 'crisis' while on visit to Japan

Bangladesh's interim government strips former ruling party of registration, barring it from polls

Nigeria has a food security problem as water for crops is harder to find

Brit dad with just 37 followers jailed for TEN years over a single tweet

Dad stabbed his three kids in throat to 'stop them screaming' after his secret was exposed

The Philippines has voted - now the game of thrones begins again

Tuesday Briefing

Xi slams "bullying," says there are "no winners" in trade wars after U.S.-China tariffs deal

The tiny town ravaged by genetic disorder - 'almost everyone is a cousin'

Campus protests flare on a smaller scale than last spring, but with higher stakes

Trump’s sons drumming up deal in Qatar amid country’s rumored gift of $400m Air Force One replacement

Trump says it would be 'stupid' not to accept Qatari plane - as jet already in the US

Trump 'thinking' of going to Turkey for proposed Zelenskyy-Putin peace talks

Henrique, Skinner help Oilers push Knights to brink of elimination with 3-0 win

Bowen: Denying food to Gaza is 'weapon of war', says UN refugee agency head

Scoop: Senate gears up for Trump 2.0 judge confirmations

Some Republican senators are concerned over the prospect of Qatar gifting Trump a jet

California Gov. Gavin Newsom tells cities to ban homeless encampments

Trump administration welcomed white Afrikaners while ending Afghan protections

Ukraine-Russia war latest: Trump says he could join Putin and Zelensky at Turkey peace summit

Episcopal Church quitting federal aid partnership over Trump embrace of white South African ‘refugees’

Trump live: US president begins landmark Middle East tour after hailing China relations ‘reset’

Mercury fuels gold mining in Senegal, it’s poisoning the people who use it

London Knights hold off Oshawa Generals to take a 2-1 series lead in OHL Championship

British couple killed after high-powered Ferrari crashes off mountain highway into river

Trump's mediation offer on Kashmir puts India in a tight spot

Russia responsible for downing of MH17, UN body rules

Raptors drop down to ninth after draft lottery

Manitoba committee to study support for journalism could be running by summer

Permanent new Vancouver exhibit honours contributions of Chinese-Canadian soldiers

Green Bay Packers sign Winnipeg Blue Bombers draft pick Taylor Elgersma

911 call on night UVic student overdosed was ‘the most complex,’ doctor testifies

He’s not a CIBC customer. So how did a fraudster open a line of credit in his name?

B.C. hires $150K consultant to advise on future of Downtown Eastside

Maple Ridge city councillor on leave amid criminal charges

Why the mighty Himalayas are getting harder and harder to see

Gold is booming – but how safe is it for investors, really?

Stars hit the Cannes Film Festival: Five things to look out for

New SEC chair intends to write rules for crypto

Harvard decries Trump administration's "unlawful attempts" to control school

Lopez voice settlement: How to file a claim in Apple Siri class action lawsuit

DNC takes step towards ousting David Hogg and another DNC vice chair

Islamic State fighters who returned to UK must face justice, committee says

Pope Leo XIV's passionate plea to the world's media as he issues six-word message

Trump administration ends protections for Afghans in US by citing tourism under Taliban rule

‘Environment of fear’: Popular US leftist Twitch streamer Hasan Piker says he was grilled about Trump by Customs agents at Chicago airport

Baby oil, domestic violence and a male escort: Graphic testimony emphasizes the reality of the accusations Diddy faces

Emergency crews drafting plans to welcome home residents forced out by wildfire

Construction work begins on rehabilitation of Saskatoon’s Broadway Bridge

Raptors drop down to ninth after draft lottery

Get set for summer with these sleek hairstyling tools

A Better Calgary Party to endorse some Communities First candidates to avoid vote split

Principled Accountable Coalition for Edmonton announces city council candidates