President Donald Trump, with Dr. Mehmet Oz, Administrator of the Centers for Medicare & Medicaid Services, left, and Health and Human Services Secretary Robert F. Kennedy Jr., right, holds an executive order related to drug prices, in the Roosevelt Room of the White House in Washington, Monday, May 12, 2025, in Washington.
President Donald Trump, with Dr. Mehmet Oz, Administrator of the Centers for Medicare & Medicaid Services, left, and Health and Human Services Secretary Robert F. Kennedy Jr., right, holds an executive order related to drug prices, in the Roosevelt Room of the White House in Washington, Monday, May 12, 2025, in Washington.
Americans pay higher costs for prescription drugs than any other developed nation, according to Reuters. West Virginians consistently struggle with health problems and health care costs at a rate much greater than the national average. President Donald Trump’s executive order, signed earlier this week, to lower those costs is a well-intentioned policy meant to address this key issue.
The devil, however, is always in the details. So, it’s important to examine how this executive order works (or might not work).
Like a lot of things Trump does, the concept hinges on negotiations or “making deals.†The president has given his own officials 30 days to come up with new pricing structures and meet with drug manufacturers to bring consumer costs down. A way for Americans to buy medications directly from manufacturers will be established. Through the efforts of the U.S. trade secretary, Americans will get the “best deal†on prescription prices through “most-favored nation†status for consumers, according to a issued by the Trump administration.
If prices don’t come down, according to the executive order, the United States will force manufacturers to offer most-favored nation pricing and “take other aggressive measures to significantly reduce the cost of prescription drugs to the American consumer and end anti-competitive practices.â€
In all seriousness, this sounds great.
Unfortunately, the executive order is vague, undercutting its potential efficacy.
Which medications will this affect? The order doesn’t say. It’d be nice to assume this will apply to all prescription medications, but that’s not how the pricing system and markets work. Even under a complete overhaul, this has to be hashed out, and it won’t happen overnight.
Which pharmaceutical companies will negotiate? Again, this isn’t spelled out. In this case, it’s likely the administration means all of them. Getting every drug manufacturer to the table and in agreement on massive price restructuring at all, let alone within 30 days, is the longest of long shots. It’s possible the deadline and threat of penalties are just a way to get some to the table or see a modicum of reduced pricing. That could be viewed as a victory, building momentum toward more widespread results for consumers, but such a strategy would take patience and sustained effort, which are not exactly strong suits of the current administration.
Punitive actions for failing to drop prices are not well-defined either, and mechanisms for enforcement seem tenuous.
Another aspect of the order requires manufacturers to stop offering cheaper prices in foreign markets. There’s little to no incentive for pharmaceutical companies to comply with that and nothing Trump can really do to force them. Yes, the United States would seem to have leverage as the world’s largest consumer of prescription medications, but that doesn’t necessarily equate to dictating lower pricing here and/or higher pricing around the globe.
As Yunan Ji, assistant professor of strategy in the business of health initiative at Georgetown’s McDonough School of Business, , “When a really large economy factors prices against some smaller economies, that’s going to affect the whole global equilibrium. So, it’s not certain that the U.S. 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.â€
Restructuring drug prices is a worthy goal, but it’s going to take a lot longer than a month, even if the administration aggressively pursues this new policy. Likewise, aggressive (or any) pursuit will probably lead to legal challenges, which will slow things up even more.
The entire health care system needs to change, as it relates to cost in the United States, and attempting to lower prescription prices is a worthy, bipartisan goal. But it’s going to take a lot more attention to detail and a lengthy, determined effort to pull it off.
