Trump seeks favored-nation order on drug prices-but what would that even look like?

Despite tough talk, President Donald Trump has watched U.S. drug prices climb since he took office. Now, Trump says he favours an executive order to address the problem—but his approach has some experts bewildered. In a wide-ranging face-to-face with reporters Friday, Trump said the White House was considering an order creating a “favored-nation” clause for drugs sold to the U.S. government, which would essentially secure the lowest possible prices on the market—or so he says. While it’s not yet clear what the scope of the proposal would be—or how it differs from the administration’s international price index pilot program—Trump said the measure would level the playing field for government payers. “For years and years, other nations paid less for drugs than we do—sometimes by 60% or 70%,” Trump said. “Why should other nations—like Canada—but why should other nations pay much less than us? They’ve taken advantage of this system for a long time: pharma.” On the heels of Trump’s comments, Nasdaq’s Biotechnology Index tumbled from a high of $3,480.81 on Friday morning to $3,435.35 at market close—a 1.13% decrease. The index is down roughly 6.6% from the same time last year. So far, experts don't think such an order would have much effect. And typically, "favored nation" status is something the U.S. bestows on trading partners—other countries—rather than companies. According to the World Trade Organization, a most-favored-nation clause "denotes the equal treatment of all countries" when it comes to trade.