Trump's Drug Pricing Order Promises Savings—But at What Cost to Louisiana's Innovation and Access?

When President Trump issued Executive Order 14297 on May 12, 2025, mandating that Medicare and Medicaid tie drug prices to those paid in other wealthy nations, it reignited a long-standing debate over the risks of government-imposed price controls in health care. Supporters of the order argue it will reduce costs for consumers, particularly for older Americans and low-income patients who struggle to afford life-saving medications. In Louisiana, where more than half of all children and a third of working-age adults rely on Medicaid, those short-term savings could be meaningful.

But the bigger picture is more complicated. By adopting a “most-favored-nation” pricing model, the administration is threatening to impose international price caps on U.S. pharmaceuticals—an idea long associated with European-style health systems. While it might sound fair to pay what other countries pay, America’s higher drug prices are what help drive innovation. Roughly two-thirds of all new drugs are developed in the United States. That’s not a coincidence—it’s a result of the risk-taking and private capital that America’s market-based system allows.

In Louisiana, this matters. Our state is home to a growing life sciences sector, anchored by research at LSU, Tulane, and Baton Rouge’s biotech corridor. If profit incentives shrink, investment in new therapies—especially for rare diseases and niche conditions—may dry up. For Louisiana’s rural hospitals and health clinics, the downstream effects could include reduced reimbursement rates and tighter operating margins, making it harder to keep doors open in medically underserved communities.

The administration says its plan will force other countries to “pay their fair share” and claims that pharmaceutical companies will continue to innovate. But even if the intentions are good, the reality is that drugmakers may respond by hiking prices abroad, reducing availability of certain medicines, or slowing the pace of clinical development. Already, analysts have warned that the executive order lacks legal teeth and is likely to face challenges in court. Previous attempts to implement international pricing models through regulation have failed under both Republican and Democratic administrations.

There’s no doubt that Americans pay too much out of pocket for prescriptions. But price control schemes like this one may do more harm than good. In a state like Louisiana, where Medicaid plays an outsized role in both our health care system and our economy, the risks of undermining innovation and destabilizing access are too great to ignore. Policymakers should look for ways to reduce costs through transparency, competition, and faster approval of generics—not by importing the same price controls that have led to shortages and stagnation abroad.