US PRESIDENT Donald Trump has signed an executive order directing pharmaceutical companies to reduce US drug prices to align with what other countries pay, causing sales turmoil in pharma stocks and raising concerns in other countries.
The order gives drug companies price targets in the next 30 days, and notes that further action will be taken to lower prices if companies do not make "significant progress" toward those goals.
Trump told a press conference he is seeking cuts of between 59% and 90%.
"Everybody should equalise, everybody should pay the same price," he said.
The United States pays the highest prices for prescription drugs, often nearly three times more than other developed nations.
"The US has for too long turned its back on Americans, who unwittingly sponsor both drug manufacturers and other countries," the order states.
In a system akin to Australia's Pharmaceutical Benefits Scheme, the executive order directs the Health and Human Services Secretary, currently Robert F Kennedy Jr, to have the government buy prescription drugs directly from the manufacturers at "the most-favoured nation price", which means the lowest price other countries are paying.
By reducing the amount that drug companies can charge Americans, Trump expects pharmaceutical companies will compensate by charging the rest of the world - including Australia - higher prices.
An early warning of the move (PD 12 May) sent pharma stocks tumbling, but they rallied when it appeared that the order was not as bad as feared.
The above article was sent to subscribers in Pharmacy Daily's issue from 13 May 25
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