Yahoo Finance

President Trump announcing his intention to cut drug prices on Truth Social. This morning, Trump also talking about his plans for Big Pharma during a press conference earlier today.

Some prescription drug and pharmaceutical prices will be reduced almost immediately by 50 to 80 to 90%. Big Pharma will either abide by this principle voluntarily, or we'll use the power of the federal government to ensure that we are paying the same prices as other countries.

For more, we're bringing in now Yahoo! Finances Jordan Weismann. Jordan, great to see you. Walk me through what you make of today's announcement, Jordan.

Uh you know, as one of the experts I was talking to today told me, uh this executive order really raises more questions than it provides answers. Um you know, Donald Trump is talking about uh implementing what he's calling a most favored nation plan where the US would pay no more for prescription drugs than the lowest number that or the lowest amount that other developed nations pay. He actually tried to do something like this at the end of his last term. Uh they rushed a version of it out, a slightly narrower version of it out the door at the end of 2020. And um I think the technical term for what happened was he got absolutely stuffed by the courts. Um a federal judge has blocked the plan, basically on technical grounds, saying that they hadn't uh kind of crossed every T and dotted every I that was necessary. But the lawsuits also suggested there were a lot of other challenges that a plan like it could face. Um Trump here is talking about kind of going at it more aggressively, using uh kind of jawboning companies to try and go along with it, and then using regulation, and maybe even investigations to force them to comply, and then also trying to pressure our trade partners to uh you know, pay more for prescription drugs, so that pharma companies don't feel the need to charge Americans as much. Um it's ambitious. Will it work? Who knows? It's it's hard to people I've talked to are expressing some skepticism. Let's put it that way.

Jordan, one of the ways that um Trump does have maybe a little bit more power is with the prices that the government itself pays for these drugs, right? Through uh Medicare and Medicaid. Um so there do we expect to see some changes, and then maybe a ripple effect through the system somehow from that?

Uh yes and no. Um so one way he could try and pursue this plan is through uh the Medicare uh drug price negotiations that uh started under President Biden. There's a new round of those coming up. It's possible that Trump could say, yes, this time we want most we want the lowest price that you charge elsewhere. He could try to, you know, pursue a most favored nation plan through that. Um that would only be about 10 new drugs, or 10 drugs total, um but it's something. Um at the same time, yes, there are, you know, there are statutes that give them some power to come up with new pricing plans under Medicare, but they tend to be fairly narrow. This stuff is very carefully regulated. Um and a lot of the ways they have to go about uh buying drugs are spelled out very explicitly in statute. Um so that could become a little bit of a legal hurdle. That said, um you know, Donald Trump has if nothing else shown that he's willing to, you know, push up to the absolute limits of the law, and then, you know, see what the courts say. So, you know, this might be another example where he just, you know, doesn't worry too much about the legal niceties and just goes for broke.