Overview

• President Trump signed an executive order mandating U.S. drug prices match the lowest rates in OECD countries with similar economic profiles.
• Economic models predict U.S. prices would drop modestly, by an estimated 7.5%, while prices in other countries could rise significantly, up to 216%.
• Critics warn the policy could undermine global pharmaceutical innovation by reducing the high U.S. revenues that fund the majority of R&D efforts.
• The Department of Health and Human Services is drafting regulations to implement the policy within 30 days, with expected legal challenges from pharmaceutical companies.
• Analysts highlight the risk of reduced access to lifesaving drugs globally and question the long-term benefits of the pricing strategy for U.S. consumers.