Trump to follow ‘most favoured nation’ policy for medicines, cut drug prices

US President Donald Trump said on Sunday he would sign an executive order to cut prescription drug prices to the level paid by other high-income countries. He estimated the reduction to be between 30 per cent and 80 per cent.

Trump posted on Truth Social that he would sign the order on Monday morning to pursue "most favored nation" pricing, also known as international reference pricing. The US currently pays the highest prices in the world for many prescription drugs, often nearly three times more than other developed nations.

The president said the policy would bring fairness to America by equalising drug prices with the lowest prices paid by any nation worldwide. He stated, "I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World."

Drugmakers have been expecting an order focused on the Medicare health insurance programme, according to four drug industry lobbyists briefed by the White House. The order is expected to cover a wider range of drugs beyond those currently subject to negotiation under President Joe Biden's Inflation Reduction Act. 

Under this law, Medicare has negotiated prices for 10 drugs, with those prices set to take effect next year. More medicines were scheduled for negotiation later this year.

This is not the first time President Trump has attempted to link drug prices to those paid by other countries. During his first term, a court blocked a proposed international reference pricing programme. That proposal was projected to save taxpayers more than $85 billion over seven years by reducing US annual drug spending of over $400 billion.