The big announcement that President Trump teased earlier this week in the Oval Office is a “most favored nation” plan to cut Medicare drug prices, sources told CBS News.
The Trump administration previously sought to implement the “most favored nation” idea during Mr. Trump’s first term, tying some high-cost Medicare drugs administered by health care providers to “the lowest price that drug manufacturers receive in other countries.”
Trump said in the Oval Office on Tuesday that in the coming days, he’d reveal “a truly earth-shattering and positive development for this country and for the people of this country.”
White House spokespeople declined to comment. Health and Human Services did not immediately respond to a request for comment.
Court orders sought by the drug industry and others blocked the Centers for Medicare and Medicaid Services from implementing the proposal in Mr. Trump’s first term, saying that the government failed to go through the proper rulemaking steps to create and implement the policy, which was finalized in late 2020.
“While there’s nothing unlawful per se about rushing to enact policy in the final days of a presidential administration (indeed, it’s a time-honored tradition), executive branch officials may not circumvent clear legal requirements in the eleventh hour to achieve goals they couldn’t accomplish in the normal course,” a federal judge in California ruled in 2020.
The Biden administration abandoned the proposal in 2022, blaming court orders blocking the model and concerns raised by stakeholders, including fears that it could cut off some Medicare beneficiaries from drugs and strain providers.
Mr. Trump’s Health and Human Services Secretary Robert F. Kennedy Jr. hinted at the possibility of the policy returning on Tuesday, pointing to higher prices in Europe for the blockbuster diabetes drug Ozempic. The drug is also used for weight loss under a different brand name, Wegovy.
“Right now the big impediment is really price. And we’re negotiating that with the drug companies and seeing if we can at least launch some pilot programs, or if we can get the price low enough, we can make it available at government cost to everybody,” he said in an interview with Newsmax.
Kennedy defended a decision by the Trump administration last month not to cover weight loss drugs in Medicare and Medicaid, scrapping a proposal touted by the Biden administration. The Trump administration is continuing to negotiate the cost of Ozempic in Medicare under talks launched by the Biden administration, but only for its uses to treat diabetes and other health conditions.
While drugs like Ozempic are “miracle drugs in many ways,” Kennedy warned that their cost was prohibitively expensive.
“If we made that so that Medicaid, Medicare paid for it, and that private insurance companies had to pay for it, we would double the cost of health insurance to most employers in this country. And that would really be destructive,” he said.
Politico reported earlier that Mr. Trump would direct aides to pursue the initiative to reintroduce the drug pricing plan he wanted in his first term.
