Trump's Trials - Trump signs an order to reduce drug prices, but it's unclear how it would work

Episode Date: May 13, 2025

President Trump is taking aim at U.S. drug prices with an executive order geared toward forcing drug companies to match the lower prices paid in other developed countries, as NPR's Sydney Lupkin reports. Support NPR and hear every episode of Trump's Terms sponsor-free with NPR+. Sign up at plus.npr.org.Learn more about sponsor message choices: podcastchoices.com/adchoicesNPR Privacy Policy

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podcast from NPR. I'm Elsa Chang. The president is taking aim once again at prescription drug prices. He signed a new executive order today that he says will mean Americans will not subsidize drug development for the rest of the world through high U.S. prices. NPR Pharmaceuticals correspondent Sydney Lupkin is here to break it down for us. Hi, Sydney. Hi. Okay.

So walk us through what the president says he's trying to do here exactly. So he's taking aim at the fact that Americans generally pay a lot more for prescription drugs than other developed countries. And that's something both parties can agree on. Merck's cancer drug, Keytruda, costs more than $100,000 more in the United States than in Germany, for instance. And that's according to a recent Senate committee report authored by Democrats. So today's executive order is geared toward lowering prices paid in the U.S. to make them more in line with what people pay in these other countries.

And it's called most favored nation pricing. Here's President Trump talking about it at the White House this morning. Whoever is paying the lowest price, we will look at that price, and we will say that's the price we're going to pay. Trump also wants to see other countries pay more, and he seemed to be pushing drug companies to advance that cause. But other countries typically have government healthcare systems that set prices

that they're willing to pay, so why would they change? The United States, by and large, doesn't set prices, so drug companies have more freedom to set prices with what the market will bear. Hmm. Okay. Well, then what does this executive order entail exactly? It has several parts. It directs the administration to come up with target prices and share them with the industry within 30 days. If companies don't voluntarily comply, the order lays out steps the administration could take to force those lower prices, including by making administrative rules, for example. The executive order also directs the Health and Human Services Secretary to facilitate direct-to-consumer drug sales,

bypassing health insurance at lower prices. Meanwhile, it also directs the U.S. Trade Representative and Department of Commerce to take action against, quote, and Department of Commerce to take action against quote, unreasonable and discriminatory policies that lower drug prices outside the US. So the order is pretty broad and a lot is happening at once. Yeah, okay, does the administration even have the authority to do all of these things? So rulemaking to implement existing laws

is something the administration can and does do fairly routinely. But there's a lot this executive order in it, this executive order that's still hazy. It's not clear from this order which drugs the administration would target. Trump seemed to want to go after obesity drugs during the press conference. It's also not clear which countries prices could be used for comparison. And of course, there's a big question around how the Trump administration can push drug makers to get other countries to pay more. Juliette Kubansky, a Medicare drug pricing expert at the nonpartisan research

group KFF says she has a lot more questions than answers right now. It could be really good for patients and payers, she says. But I think the question really is in the details of how this gets implemented. Right. And what has the drug industry said about all of this? So when Trump teased this executive order Sunday on Truth Social, the drug industry trade group, Pharma, came out against it. The CEO for the group called it a bad deal for American patients.

Today, after the executive order was signed, he released another statement. It said Americans shouldn't have to foot the bill for global innovation. And to lower cost, America is right to push other countries to pay their fair share through trade negotiations. Though I should say trade negotiations aren't explicitly part of the order, but there's a lot of details to be fleshed out.

Truly. That was NPR Pharmaceuticals correspondent Sydney Lepkin. Thank you, Sydney. You bet. Before we wrap up, a reminder, you can find more coverage of the Trump administration on the NPR Politics Podcast, where you can hear NPR's political reporters break down the day's biggest political news with new episodes every weekday afternoon. And thanks, as always, to our NPR Plus supporters who hear every episode of the show without

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