To be fair, the GOP doesn’t actually want socialism, they just keep stumbling into it by accident.
And he just made a statement when issuing the order that this is another example of the other countries ripping us off and being unfair and us subsidizing them.
It’s clear they have no authority. The real question is, does it have the power to impose such a scheme?
Wel, that question really comes down to numbers. Is the profit for drugs in the US greater, or lesser, than the profits for drugs in the entire rest of the world?
Trump cannot unilaterally impose higher prices on other countries, but he could threaten to disallow sales in the US if the prices don’t match. So what happens then? Well, if US profits are significantly higher than world profits, the companies would likely just stop selling the drug outside the US. Other countries could either pay US prices, or do without.
But if the US profits are comparable to, or less than, world profits, then the companies will either lower US prices, or stop selling in the US.
But that considers individual drug prices in isolation. Other countries could say, “If you’re not willing to sell us drugs A and B at a reasonable price because you’re farming profits off them in the US, then we won’t buy drugs C-Z from you either.”
Someone somewhere would set up a company to manufacture and sell drugs C-Z to countries other than the US, in that case.
And they’d probably also end up licensing the patents for drugs A and B, and sell those everywhere but in the US. The patent holder can still rake in the windfall profits from US sales, while also getting some world income. And when Trump complains about A and B still being sold in other countries, the patent holder can say, “Well, that’s not us, it’s Third World Drugs, Inc. setting those prices…”
Wait, the Trumpster just said that other countries are “ripping us off” by having enacted years ago exactly the policy that he just proposed? The mind boggles! 
There’s been an argument for years that US profits have been driving drug research and development. The US spends billions inventing a drug, and proving that it’s safe and effective, and then everyone else jumps on that information, and makes use of the new drug. The claim is, without the US profits, such new drug creation is unprofitable, and so without the US consumers being raked over the coals, much less research would be done, and many fewer new drugs created.
It’s unclear if this argument is valid, but even if we assume it’s correct, this means Trump can’t lower US prices significantly without harming drug research. There’s a fundamental contradiction. If high US profits are essential for creation of new drugs, then either the US prices must stay high, or new drug creation must be curtailed. It’s like his tariff problem: ethier tariffs generate billions in revenue for the US, or they drive re-investment in US manufacturing. The two effects are in direct competition with each other, but he doesn’t realize it.
Yeah, the pharmaceutical companies can tell him to go pound sand, and what exactly can he do about it?
That’s assuming that the executive order to punish them isn’t even more unhinged and illegal; at some point rule of law has to come into play, otherwise we’ll get something like an executive order fining a pharma company for not doing his bidding.
He’s doing plenty of harm to drug and other research in other ways, by drastically cutting funding to NIH, universities, etc.
BTW, in this speech, he claimed to invent the word “equalizing”, “maybe the best word ever.” Can you imagine if Biden had said something like that? The press would never shut up about it.
Anyway, back to the topic, the NY Times take on it is “With No Real Policy, Trump Asks Drugmakers to Lower U.S. Prices”, so it seems there’s not much there there.
Oh, he’ll aim the DOJ and what’s left of IRS and FTC and SEC at the Pharmas as companies and their execs personally for “collusion” and price-fixing and anti-trust offenses real and imaginary both civil and criminal. (Remember how it was so terrible The Other Guys were engaging in “lawfare”?)
I doubt we’ll hear much followup from this at all. I think it’s just an attempt to dominate the weekly news cycle on Fox.
I can’t find it now, but in an article earlier it said the US presented 70% of profit vs 30% for the rest of the world. If drug makers had to choose, they’d pick the US for sure.
Here it is: Trump signs order aiming to cut some U.S. drug prices to match lower ones abroad
More likely they’d just split their American and rest-of-world operations up into separate companies. If Trump somehow prevented that, there would certainly be foreign companies springing up to get their share of 30% of an unimaginably huge amount of money.
Maybe I am missing something, but the actual executive order does not look to be as extreme, or as illegal, as what Trump had in his Truth Social post yesterday:
Policy can change from day to day. But the way it looks to me, Trump is trying to intimidate the drug companies into slightly lowering U.S. prices. I think that’s wrong, but it may work just a bit and help him stabilize his polling numbers.
If I was a drug compang executive, I would ask for a lisf of drugs where we were already planning to lower prices, and publicize that. But maybe that’s wrong. Maybe they should threaten him back. Say they wil not market drugs in shortage in the U.S. The bully will then back down. Probably.
I should withdraw everything in the last paragragh immediately above except maybe the first sentence.
What a surprise, ain’t it? Blowhard blows hard to make supporters applaud and opponents freak out, but doesn’t measure up.
Though don’t count him out - he will still be posting as if he did order what he announced … and saying he achieved it.
As I mention above, that was the NY Times take, too – no policy, so he’s just asking them to lower prices. Oh, why didn’t you ask earlier! Here, have some Ozempic.
There’s also an argument that the drug companies spend even more on advertising, PR, and lobbying than they do on R&D, and that much of the spending on R&D is for minor changes so that they can renew patent protection and prevent generic competition on an existing drug.
If this was true, US prices could come down a lot while other prices go up some to wind up with the same amount for research..
I don’t think it’s true, though.