One Big Thing

President Trump’s new executive order aims to dramatically cut prescription drug prices by requiring federal healthcare programs to pay the same rates as European and Asian countries – a move that could reduce costs by up to 10 times current levels.

Why It Matters

This could be a game-changer for both patients and healthcare providers struggling with skyrocketing prescription costs.

By The Numbers

“Sometimes it’s three, four, ten times the difference,” says Francis Gibson, president & CEO of the Utah Hospital Association, comparing U.S. drug prices to international rates.

The Big Picture

Healthcare costs in America are driven by three main players: hospitals, health insurers, and pharmaceutical companies. While hospitals operate on “very, very thin margins,” according to Gibson, this order specifically targets pharmaceutical pricing.

“Hospitals buy drugs by the thousands, by the millions every single year,” Gibson explains. “As those costs go down, our bill and our hospital will go down… you would see a cheaper bill coming through the hospital for the drugs that you use while you’re there.”

Yes, But…

The pharmaceutical industry maintains one of Washington’s largest lobbying operations, which could present significant obstacles to implementation.

“There have been presidents that have talked about this for years, but no one’s been willing to do this,” Gibson notes. “Congress is going to have to vote. It’s going to be a tough vote.”

The Bottom Line

While not a complete solution to America’s healthcare cost challenges, the executive order represents a significant first step toward addressing runaway prescription drug prices.