Trump asserts unprecedented drug price drop, provides no data
TL/DR –
US President Donald Trump has asserted that due to his invocation of favored nations status for the US, American drug prices have dropped by 500-700%, though he did not provide supportive data. Trump’s claim follows the report by the US Medicare health plan that its recent price negotiations will save 36% on 15 of its costliest drugs, leading to about $8.5 billion in saved prescription costs. This method of negotiation came after the enactment of President Joe Biden’s Inflation Reduction Act (IRA) of 2022, which lifted a law preventing Medicare from negotiating with drugmakers.
Trump Touts Significant Drop in U.S. Drug Prices
Former U.S. President Donald Trump made a bold announcement on Saturday, stating that drug prices in the United States have seen a drastic reduction to levels not seen in recent history.
The former president argued that this considerable decrease is a result of the United States invoking its favored nations status, with price drops reaching up to 500%, 600%, or even 700%. However, Trump did not provide any supporting data or evidence to back his claims.
Trump took to social media to tout his accomplishment. “No other President has been able to do this, BUT I HAVE!” he exclaimed, arguing this is a step towards “far better, HEALTHCARE!” Trump further connected this achievement to the Republicans, stating, “Remember, this was done by us, and nobody else.”
US Medicare Health Plan Price Negotiations
Recently, the U.S. Medicare health plan declared that new pricing agreements for 15 of its costliest drugs will result in a 36% savings compared to recent yearly spending. This translates to approximately $8.5 billion in net covered prescription costs.
These annual price negotiations were made possible under President Joe Biden’s Inflation Reduction Act (IRA) of 2022, a law that reversed the previous prohibition on Medicare negotiations with pharmaceutical companies.
Trump Administration’s MFN Pricing Terms Outlined
As per a Reuters report, the Trump administration clarified what it deems as most-favored-nation (MFN) pricing terms: it would be the lowest price in any country that is a member of the Organisation for Economic Co-operation and Development and has a gross domestic product per capita of at least 60% of the US’s GDP per capita.
Separately, Medicare suggested a smaller “country basket” under a pilot program. This includes six G-7 countries (the UK, France, Germany, Italy, Canada, and Japan), in addition to Denmark and Switzerland. The MFN price would be determined using the second-lowest price within this basket of countries, modified by GDP per capita.
—
Read More US Economic News