• Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock
Editor's Pick

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

by May 13, 2025
written by May 13, 2025

President Donald Trump signed an executive order Monday instructing drug companies to reduce prices of prescription drugs or face consequences from the federal government. 

But the effort amounts to price control since it’s not limited to just government programs — and similar policy initiatives in other sectors have prompted shortages, according to Michael Cannon, director of health policy studies at the Washington-based libertarian-leaning Cato Institute think tank. 

‘We have seen government price controls in housing,’ Cannon told Fox News Digital Monday. ‘We call it rent control, and it creates shortages. We have seen it when it comes to food. We call them price caps there too, and it produces shortages.’ 

‘We see price caps after natural disasters,’ he continued. ‘We call them anti-gouging laws, and they produce shortages. And so that’s what we can expect price controls to produce when it comes to pharmaceuticals as well — that’s if you have a binding price ceiling, you’re going to get a shortage, and I think it’s totally a wrong-headed thing.’ 

Price control occurs when the government steps in to impose limits on how much one can charge for various goods or services in the free market. 

While price controls may lower costs for some consumers, they have largely been ineffective in American history. For example, former President Richard Nixon implemented price controls in the 1970s in an attempt to fix wages and other prices — which backfired and resulted in the gas crisis and other shortages across the country. 

For example, there was a series of initiatives that states unveiled in response to the COVID-19 pandemic in 2020 to address price-gouging, although they were difficult to enforce. In Michigan, Gov. Gretchen Whitmer signed an executive order in March 2020 that barred individuals or businesses from selling any products in the state ‘at a price that is more than 20 percent higher than what the business or individual offered or charged,’ according to a 2020 news release. 

Trump announced Monday that the executive order directs the Department of Health and Human Services to establish price targets for pharmaceutical manufacturers. But Cannon noted that the order isn’t just for prices for the government — it also applies to the free market and private sector.

Failure to comply will prompt the Justice Department and the Federal Trade Commission to ‘undertake enforcement action against any anti-competitive practices,’ along with other consequences. Additionally, Trump introduced plans to launch ‘most favored nations drug pricing.’

‘The principle is simple — whatever the lowest price paid for a drug in other developed countries, that is the price that Americans will pay,’ Trump said at the White House Monday. ‘Some prescription drug and pharmaceutical prices will be reduced almost immediately by 50 to 80 to 90%.’

‘We’re going to equalize,’ Trump said. ‘We’re all going to pay the same. We’re going to pay what Europe pays.’

The White House pushed back against comments that the move equated price control. 

‘If Americans had a truly free and fair market, they would not be paying several times more for the same exact prescription drugs as Europeans do,’ White House spokesperson Kush Desai said in a Tuesday statement to Fox News Digital. ‘President Trump’s historic executive order is fixing the anti-competitive behavior that’s forcing everyday Americans to subsidize the health care of other developed nations.’

Drug prices have dramatically climbed in recent years. From January 2022 and January 2023, prescription drug prices increased more than 15%, reaching an average of $590 per drug product, according to the Department of Health and Human Services. Of the 4,200 prescription drugs included on that list, 46% of the price increases exceeded the rate of inflation. 

The Pharmaceutical Research and Manufacturers of America trade group argued the executive order would harm American patients. 

‘Importing foreign prices from socialist countries would be a bad deal for American patients and workers,’ Stephen J. Ubl, the president and CEO of PhRMA, said in a Monday statement. ‘It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America.’

In April, Trump signed another executive order that aimed to tackle Medicare drug prices. Specifically, that order required HHS to standardize Medicare payments for prescription drugs, including those used for cancer patients, regardless of where a patient receives treatment. 

Patients could face a drop in prices by as much as 60%, according to a White House fact sheet.

The order also called to match the Medicare payment for certain prescription drugs to the price that hospitals pay for those drugs, up to 35% lower than what the government pays to acquire those medications, per the White House. 

The Associated Press contributed to this report. 

This post appeared first on FOX NEWS
0 comment
0
FacebookTwitterPinterestEmail

previous post
Schumer moves to block Trump DOJ nominees as he seeks answers on Qatari jet to Defense Department
next post
Biden made Harris campaign a ‘nightmare,’ destroyed her chances by staying in 2024 race too long, aides charge

related articles

Junk food banned from SNAP benefits in 6...

August 7, 2025

DOJ turns to Gabbard’s office for next step...

August 6, 2025

Senate hopefuls jostle for high-stakes seat after Blackburn...

August 6, 2025

Violent attack reignites BOWSER Act debate as Trump...

August 6, 2025

New Romanian law may have averted NATO clash...

August 6, 2025

‘Should have been prepared’: GOP senators fight for...

August 6, 2025

Virginia Dem gubernatorial candidate and ex-CIA officer took...

August 6, 2025

Vance, Bondi, Patel to huddle at VP residence...

August 6, 2025

Trump blasts Schumer, Democrats as ‘country-hating thugs’ amid...

August 6, 2025

Russia, China practice destroying ‘enemy’ submarine in naval...

August 6, 2025
Enter Your Information Below To Receive Free Trading Ideas, Latest News, And Articles.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest News

  • Render (RNDR) hits crucial user milestone ahead of much-anticipated token swap

    July 18, 2024
  • Trump admin guts Institute of Peace of ‘rogue bureaucrats’ after DOGE standoff in government office

    March 19, 2025
  • Biden says he’s been carrying out ‘most aggressive climate agenda’ in history as he designates CA monuments

    January 15, 2025
  • Tesla denies report that the EV maker is looking to replace Elon Musk

    May 1, 2025
  • Trump administration torpedoes SCOTUS with emergency requests and sees surprising success

    July 3, 2025

Popular Posts

  • 1

    Secret Service admits leaning on ‘state and local partners’ after claim it ignored Trump team’s past requests

    July 21, 2024
  • 2

    Five more House Democrats call on Biden to drop out, third US senator

    July 19, 2024
  • 3

    Elon and Vivek should tackle US funding for this boondoogle organization and score a multimillion dollar win

    December 4, 2024
  • 4

    Forex Profit Calculator: Maximize Your Trading Potential

    July 10, 2024
  • 5

    Biden calls to ‘lower the temperature’ then bashes Trump in NAACP speech

    July 17, 2024

Categories

  • Economy (829)
  • Editor's Pick (5,651)
  • Investing (634)
  • Stock (874)

Latest Posts

  • FBI investigation of Trump assassination attempt involves ‘full force’ of the department, Wray says

    September 18, 2024
  • FTSE 250 Index: Performance and Investment Options

    August 7, 2024
  • Democratic lawmaker demands Musk, OPM stop sending mass emails to staffers: ‘Chaotic’

    February 28, 2025

Recent Posts

  • ExxonMobil exits Malaysia, sells key oil and gas assets to Petronas

    July 19, 2024
  • Democrat rep vows to work with Trump on key part of tariff plan: ‘Hoping that I can help’

    April 3, 2025
  • Trump fires 17 government watchdogs at various federal agencies

    January 25, 2025

Editor’s Pick

  • New poll reveals what Democrats think of Harris as president

    July 19, 2024
  • Trump accuses ‘scam artist’ Schiff of lying about Maryland home to commit mortgage fraud

    July 15, 2025
  • USAID workers put on leave as Trump officials investigate resistance to aid pause

    January 28, 2025
  • About us
  • Contacts
  • Privacy Policy
  • Terms & Conditions

Disclaimer: moneyrisetoday.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2025 moneyrisetoday.com | All Rights Reserved

Money Rise Today – Investing and Stock News
  • Economy
  • Editor’s Pick
Money Rise Today – Investing and Stock News
  • Investing
  • Stock