President Donald Trump’s executive order to cut prescription drug prices has ignited a national debate about how to reconcile affordability with medical innovation. The new policy, which adopts ‘most favored nations drug pricing,’ aims to reduce the cost of pharmaceuticals by aligning U.S. prices with the lowest global rates. This approach is expected to significantly lower the price of medications for patients, including those suffering from costly gene and cell therapies. However, experts warn that the policy will not produce immediate savings, as government regulators must draft and implement new rules, a process that may take several months.
The executive order highlights the stark financial disparities within the U.S. healthcare system, especially for patients requiring high-cost treatments for rare genetic disorders. The most expensive drugs today—such as lenmeldy and hemgenix—cost millions and are typically used for rare conditions that affect only a small number of patients. These therapies, often involving cutting-edge gene and cell-based treatments, offer promising cures but are prohibitively expensive. In contrast, blockbuster drugs like keytruda, eliquis, ozempic, and humira generate billions in annual revenue. These medications, often used for more common conditions like cancer, heart disease, and diabetes, contribute significantly to the U.S. economy.
Industry leaders have raised concerns that aggressive price cuts could discourage pharmaceutical companies from investing in research and development, which is crucial for creating new treatments. Dr. Jacob Glanville, CEO of Centivax, suggests that while the proposal might affect certain high-cost therapies, it is unlikely to impact vaccines or generic drugs, which remain relatively affordable. He warns that without reforms to the cost of clinical trials and drug manufacturing, the U.S. might lose its edge in medical innovation.
The executive order’s potential impact is further complicated by the structure of the U.S. healthcare system, which includes complex insurance networks and high hospital costs. While the administration emphasizes the need to address exorbitant drug prices, many experts argue that the broader systemic issues in the healthcare sector must also be addressed to ensure sustainable affordability. As the implementation of the order unfolds, the conversation about the balance between affordability and innovation is likely to dominate policy discussions for months to come.