The US Pays Some of the Highest Drug Prices in the World. Can Trump Fix That?
- May 15, 2025
- 3 min read
From PBS’ Amanpour and Company
Teaser/Abstract
"This week, President Trump issued an executive order aiming to reduce high prescription drug prices and insisting that drug companies ensure Americans pay the same price as other countries. Dr. Jerry Avorn is a professor of medicine at Harvard Medical School. He joins Hari Sreenivasan to discuss why the cost of medication in the U.S. is so high, and what Trump can do to bring prices down."
Source: Amanpour and Company, PBS/WNET, Season 2025, Episode aired May 15, 2025. Host: Hari Sreenivasan. Duration: 18 minutes 35 seconds. Available on PBS.org and YouTube.
SUMMARY
In this 18-minute PBS interview, Dr. Jerry Avorn joins Hari Sreenivasan to assess President Trump's May 2025 executive order on prescription drug pricing — titled "Delivering Most Favored Nation Prescription Drug Pricing to American Patients" — and to explain the structural forces that have made the United States the highest drug-pricing country among wealthy nations. The conversation covers the meaning and feasibility of most-favored-nation pricing, why the US is uniquely without drug price negotiation mechanisms, how other countries determine what to pay for drugs, and the limits of the pharmaceutical industry's R&D-cost justification for high prices.
BACKGROUND
The interview was prompted by President Trump's executive order claiming that some prescription drug prices would be reduced "almost immediately, by 50% to 80% to 90%," with the administration promising that drug companies would either abide voluntarily or face federal pressure to match the prices paid by other countries. Dr. Avorn positions this as an opportunity to assess both what the president got right in framing the problem and what remains unresolved about the proposed solutions.
KEY FINDINGS
What the executive order got right — and what it left unanswered. Dr. Avorn credits the Trump administration for raising public awareness of a genuine and important fact: "Americans pay twice per capita what people in other wealthy countries pay for the very same drugs, often made by the same company in the same factory." He characterizes the order as "kind of aspirational," noting that while it correctly identifies the problem, it provides no clear road map for how most-favored-nation pricing would actually be achieved. Congressional action would be required for any binding mechanism, and Congress has previously declined to enact such requirements.
Why the US pays more than every other wealthy country. Dr. Avorn identifies the structural cause as unique to the United States: "Alone among the wealthy countries, the United States allows drug companies to set a price at any level they want, and then we are, as consumers or as health care systems or as patients, we are obliged to pay that." Every other comparable nation uses some form of independent assessment of a new drug's clinical value as the basis for a negotiated price. As Dr. Avorn explains: "Virtually every other wealthy country in the world has a process through which they figure out, how good is this new drug, is it better than what we have? Does it have some advantage in effectiveness or safety? And they determine a price as a start of a negotiation with the drug company and say, we think this drug ought to be worth that, and the company comes back, says, it should be higher, and there's a conversation that occurs between the health care system and the manufacturer, and that determines what they pay for the drug. Here, it's whatever the company wants to charge, pretty much."
The R&D cost justification. Host Sreenivasan raises the pharmaceutical industry's standard defense of high prices: that for every drug that reaches the market, fifteen failed in trials, and those sunk costs must be recouped. Dr. Avorn engages with this argument, acknowledging a grain of truth while identifying the problems with it — including the substantial role of publicly funded NIH research in foundational drug discovery, and the mismatch between R&D investment and price for many drugs whose development was heavily subsidized by taxpayers.
The limits of most-favored-nation pricing as a mechanism. Dr. Avorn's assessment of the Trump approach reflects skepticism he has expressed consistently across multiple interviews in this archive: the political and legislative obstacles to actually imposing most-favored-nation pricing are substantial, and the pharmaceutical industry's response to previous versions of this proposal has been to lobby successfully against its implementation. The movement in pharma stock prices after similar announcements — upward rather than downward — reflects market confidence that the rhetoric will not translate into binding policy.