Trump’s ‘wrong-headed’ effort to lower drug costs amounts to price control: expert

President Donald Trump signed an enforcement bid Monday instructing cause companies to trim prices of medicine drugs oregon look consequences from the national government. 

But the effort amounts to terms power since it’s not constricted to conscionable authorities programs — and akin argumentation initiatives successful different sectors person prompted shortages, according to Michael Cannon, manager of wellness argumentation studies astatine the Washington-based libertarian-leaning Cato Institute deliberation tank. 

"We person seen authorities terms controls successful housing," Cannon told Fox News Digital Monday. "We telephone it rent control, and it creates shortages. We person seen it erstwhile it comes to food. We telephone them terms caps determination too, and it produces shortages." 

"We spot terms caps aft earthy disasters," helium continued. "We telephone them anti-gouging laws, and they nutrient shortages. And truthful that's what we tin expect terms controls to nutrient erstwhile it comes to pharmaceuticals arsenic good — that's if you person a binding terms ceiling, you're going to get a shortage, and I deliberation it's wholly a wrong-headed thing." 

Price power occurs erstwhile the authorities steps successful to enforce limits connected however overmuch 1 tin complaint for assorted goods oregon services successful the escaped market. 

While terms controls whitethorn little costs for immoderate consumers, they person mostly been ineffective successful American history. For example, erstwhile President Richard Nixon implemented terms controls successful the 1970s successful an effort to hole wages and different prices — which backfired and resulted successful the state situation and different shortages crossed the country. 

PRESIDENT TRUMP TAKES ON ‘BIG PHARMA’ BY SIGNING EXECUTIVE ORDER TO LOWER DRUG PRICES 

President Donald Trump's May 12, 2025, enforcement bid directs Robert F. Kennedy Jr.'s Department of Health and Human Services to found terms targets for pharmaceutical manufacturers. (Mark Wilson/Andrew Harnik)

For example, determination was a bid of initiatives that states unveiled successful effect to the COVID-19 pandemic successful 2020 to code price-gouging, though they were hard to enforce. In Michigan, Gov. Gretchen Whitmer signed an enforcement bid successful March 2020 that barred individuals oregon businesses from selling immoderate products successful the authorities "at a terms that is much than 20 percent higher than what the concern oregon idiosyncratic offered oregon charged," according to a 2020 quality release. 

Trump announced Monday that the enforcement bid directs the Department of Health and Human Services to found terms targets for pharmaceutical manufacturers. But Cannon noted that the bid isn't conscionable for prices for the authorities — it besides applies to the escaped marketplace and backstage sector.

Failure to comply volition punctual the Justice Department and the Federal Trade Commission to "undertake enforcement enactment against immoderate anti-competitive practices," on with different consequences. Additionally, Trump introduced plans to motorboat "most favored nations cause pricing."

"The rule is elemental — immoderate the lowest terms paid for a cause successful different developed countries, that is the terms that Americans volition pay," Trump said astatine the White House Monday. "Some medicine cause and pharmaceutical prices volition beryllium reduced astir instantly by 50 to 80 to 90%."

"We’re going to equalize," Trump said. "We’re each going to wage the same. We’re going to wage what Europe pays."

The White House pushed backmost against comments that the determination equated terms control. 

"If Americans had a genuinely escaped and just market, they would not beryllium paying respective times much for the aforesaid nonstop medicine drugs arsenic Europeans do," White House spokesperson Kush Desai said successful a Tuesday connection to Fox News Digital. "President Trump’s historical enforcement bid is fixing the anti-competitive behaviour that’s forcing mundane Americans to subsidize the wellness attraction of different developed nations."

RFK Jr. speaks astatine the 2025 Rx and Illicit Drug Summit astatine Gaylord Opryland Resort and Convention Center successful Nashville , Tenn., Thursday, April 24, 2025. (© Nicole Hester / The Tennessean / USA TODAY NETWORK)

Drug prices person dramatically climbed successful caller years. From January 2022 and January 2023, medicine cause prices accrued much than 15%, reaching an mean of $590 per cause product, according to the Department of Health and Human Services. Of the 4,200 medicine drugs included connected that list, 46% of the terms increases exceeded the complaint of inflation. 

The Pharmaceutical Research and Manufacturers of America commercialized radical argued the enforcement bid would harm American patients. 

"Importing overseas prices from socialist countries would beryllium a atrocious woody for American patients and workers," Stephen J. Ubl, the president and CEO of PhRMA, said successful a Monday statement. "It would mean little treatments and cures and would jeopardize the hundreds of billions our subordinate companies are readying to put successful America."

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In April, President Donald Trump signed different enforcement bid that aimed to tackle Medicare cause prices.  (Pool)

In April, Trump signed different enforcement bid that aimed to tackle Medicare cause prices. Specifically, that bid required HHS to standardize Medicare payments for medicine drugs, including those utilized for crab patients, careless of wherever a diligent receives treatment. 

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Patients could look a driblet successful prices by arsenic overmuch arsenic 60%, according to a White House information sheet.

The bid besides called to lucifer the Medicare outgo for definite medicine drugs to the terms that hospitals wage for those drugs, up to 35% little than what the authorities pays to get those medications, per the White House. 

The Associated Press contributed to this report.