Core Viewpoint - President Trump announced plans to sign an executive order on May 12 to reduce prescription drug prices in the U.S. by 30% to 80%, implementing a "most favored nation" policy that aligns U.S. prices with the lowest prices paid in other countries [1] Group 1: Drug Pricing Context - A report from RAND Healthcare indicated that in 2022, the average price of all drugs in the U.S. was 2.78 times higher than in 33 other OECD countries, with brand-name drugs being 4.22 times higher even after rebates [3] - Non-brand generic drugs, which account for 90% of U.S. prescriptions, were priced at about 67% of the average price in other countries [3] Group 2: Factors Behind High Drug Prices - Unlike most developed countries, the U.S. government does not impose price controls on drugs, allowing pharmaceutical companies to set their own prices [4] - The introduction of the Inflation Reduction Act allowed for limited government negotiation on drug prices, covering only 10 drugs, and the impact of this policy has yet to be realized [4] - Pharmacy Benefit Managers (PBMs) play a role in negotiating prices but may incentivize higher drug prices due to their compensation structure [4] Group 3: Criticism of Pharmaceutical Companies - Pharmaceutical companies claim that high U.S. drug prices reflect R&D costs, but this assertion has been challenged, with evidence suggesting that many drugs are developed with government funding [5] - A study indicated that from 2010 to 2019, 354 out of 356 drugs approved by the FDA were funded by the National Institutes of Health [5] - Major pharmaceutical companies have spent more on stock buybacks and dividends than on R&D, with advertising costs also contributing to rising drug prices [5] Group 4: Impact on Consumers - High drug prices have led to over 9 million adults in the U.S. skipping doses or delaying refills in 2021 due to cost concerns [6] - Brand-name drugs are often the first to be discontinued by patients due to their high costs and insurance authorization requirements [6] Group 5: Political and Legislative Landscape - The proposal to link U.S. drug prices to those in other developed countries has garnered bipartisan support and is seen as a significant cost-reduction measure [7] - Trump's previous attempts to lower drug prices faced resistance from the pharmaceutical industry and legal challenges, but he remains committed to this agenda in his second term [7]