On May 12, President Trump issued an executive order for Most Favored Nation (MFN) pricing to lower U.S. drug prices based on the lowest prices charged overseas, primarily targeting wealthier European nations. This is his second attempt at MFN pricing after a previous rule was repealed by Biden. The new order aims to implement MFN pricing across private insurance and Medicare, allowing only 30 days for pharmaceutical companies to voluntarily reduce prices before government action is taken. There's uncertainty around the order's legality and the potential backlash from Republicans regarding impacts on drug revenues and research.
President Trump's executive order requires Most Favored Nation (MFN) pricing, setting U.S. drug prices to the lowest rates charged overseas, particularly in wealthier European countries.
HHS Secretary Robert Kennedy Jr. and Medicare chief Mehmet Oz will initiate a rule-making process to impose lower drug pricing, following the 30-day voluntary price cut deadline.
Trump's order aims to extend MFN pricing beyond Medicare to private insurance, a strategy that some view aligns him more with Bernie Sanders than traditional Republican values.
Concerns among Republicans, including Senate Leader John Thune, indicate fears that government-mandated pricing could jeopardize new drug research and development, impacting pharmaceutical companies' revenues.
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