Trump Administration to Reintroduce 'Most Favored Nation' Drug Pricing for Medicare

The Trump administration is preparing to issue an executive order aimed at reducing U.S. prescription drug costs by linking Medicare payments for certain drugs to the lowest prices paid by other wealthy countries. This 'most favored nation' pricing strategy targets Medicare Part B drugs, which includes medications administered in healthcare settings like chemotherapy.

The approach was previously attempted in 2020 but was halted by a federal judge after litigation from the pharmaceutical industry. If implemented, this policy could significantly lower costs for U.S. taxpayers, as it would cap drug prices to international benchmarks, addressing the issue of U.S. drug prices being substantially higher than those abroad.

Experts note the policy could face strong opposition from the pharmaceutical sector, but public support remains high due to widespread concerns over medication affordability. Additionally, the administration has the option to complement this pricing model with Medicare drug price negotiations authorized under the Inflation Reduction Act, which aims to further reduce costs on high-priced medications.

This highlights ongoing debates around the role of pharmacy benefit managers in drug pricing and mentions recent policy decisions regarding Medicare drug coverage, underscoring the complex regulatory landscape and the government's multifaceted approach to tackling prescription drug costs.