President Trump’s New “Most Favored Nation” Executive Order Will Harm Patients and Taxpayers

President Trump signed a new “Most Favored Nation” executive order on Sunday afternoon, introducing artificial drug price controls into Medicare. During this unprecedented health crisis, this new order could lead to health care shortages for Americans at a time when they can least afford it.

National Taxpayers Union President Pete Sepp issued the following statement:

The President and his Administration regularly and correctly note that the United States should not emulate the state economic controls of socialist countries. It is puzzling, then, that the President would sign this 'Most Favored Nation' (MFN) Executive Order, which has Medicare Parts B and D copy the artificially deflated drug prices implemented by single-payer systems around the world. In December 2018, more than 150 economists sent a letter to the Administration about a similar proposal, warning Secretary Azar that 'setting price controls at below-market rates leads to shortages, squeezes the cost bubble toward some other portion of the economy, and imposes a deadweight cost on society.' That statement is more true today than ever, and comes at a time when the recovering American economy can ill afford deadweight costs.

The Administration cites the Council of Economic Advisers (CEA) to make their case for the MFN Executive Order, but those same CEA experts wrote in February 2020 that '[r]educing foreign price controls would increase profits and innovation, thereby leading to greater competition and lower prices for U.S. patients.' This Order tacitly endorses foreign price controls, rather than reducing them. The Administration should scrap this proposal and seek market-based reforms to Medicare that reduce complexity and long-term costs for taxpayers as well as seniors.

For more information on how introducing foreign drug price controls will lead to rationing, shortages, and worse outcomes for both patients and taxpayers, visit NTU’s resource page to learn more - including how economists from across the political spectrum oppose these kinds of price controls.

To speak with NTU President Pete Sepp on the president’s new Executive Order, please contact Kevin Glass, NTU Vice President of Communications, at 703-299-8670 or at