EXPLAINER: Why a Trump Executive Order Could Raise Prescription Drug Costs for Nigerians

United States (US) President Donald Trump is set to sign an executive order aimed at reducing prescription drug prices in his country and Nigerians may pay more for medicine as a result.

Trump announced the order, which seeks to implement a “Most Favoured Nation” (MFN) policy, on Sunday night. He said he would sign the order on Monday.

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“I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the nation that pays the lowest price anywhere in the world. Our country will finally be treated fairly, and our citizens’ healthcare costs will be reduced by numbers never even thought of before,” he wrote on Truth Social.

“Prescription drug and pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%.”

US President Donald Trump’s Truth Social post announcing his executive order to cut costs of prescription drugs in the US. The order may cause Nigerians to pay more for medicine

This policy seeks to tie the prices the US Medicare programme pays for certain drugs to the lowest prices paid by other developed nations.

Although the order is intended to lower costs for American consumers, there are indications it could have unintended consequences for countries like Nigeria, potentially driving up the cost of prescription drugs.

In this explainer, EKO HOT BLOG outlines how the MFN policy will work and how it may impact Nigeria.

What Is Trump’s Executive Order?

This is not Trump’s first attempt at such a policy. During his first term, specifically on 20 November 2020, a similar MFN proposal was blocked by a court due to procedural issues in rulemaking, and the Biden administration later abandoned it.

Although the details of the 2025 order are yet to be released, all indications are that it will revive the 2020 approach, focusing on a select group of high-cost drugs.

If the old policy is anything to go by, the latest executive order will direct the US Department of Health and Human Services (HHS) to align Medicare payments for certain physician-administered drugs (primarily covered under Medicare Part B, such as infusions for cancer treatment) with the lowest prices paid by other economically advanced countries.

US President displays an executive order in the Oval Office (Photo: Eric Lee/The New York Times)

Trump said the goal is to address the disparity whereby Americans often pay significantly more for the same drugs compared to other developed nations like Sweden, Canada, and Japan, a point he emphasised as unfair, due to pharmaceutical companies’ claims of funding research and development through US prices.

For example, a drug like Eliquis, a top-selling blood thinner, has a US list price of $606 per month’s supply but costs $114 in Sweden and $20 in Japan. Under the MFN policy, Medicare might negotiate prices closer to these lower figures, significantly reducing US spending.

Why Could This Raise Drug Costs in Nigeria?

While the MFN policy aims to benefit American consumers, its ripple effects could increase prescription drug costs in Nigeria due to the interconnected nature of the global pharmaceutical market.

Trump’s order explicitly states that drug prices “will rise throughout the world in order to equalise” and bring “FAIRNESS TO AMERICA.” This statement suggests an expectation that pharmaceutical companies, facing lower revenues in the US due to reduced Medicare payments, may raise prices in other countries to offset losses.

Considering Nigeria imports over 70 percent of the medicines consumed in the country, with medicines accounting for perhaps $4 billion within the country’s total healthcare spend of $10 billion, a price hike by pharmaceutical companies will have significant implications for costs in Nigeria.

Minister of Health and Social Welfare, Prof Ali Pate

Despite Nigeria investing in local pharmaceutical manufacturing to reduce reliance on imports, the local pharmaceutical industry still meets only about 25 percent of domestic demand, leaving Nigerians vulnerable to global price shifts and foreign exchange volatility.

Moreover, Nigeria’s healthcare system is already strained, with limited public funding and high out-of-pocket healthcare costs for most citizens. According to a Gallup poll, one in four Americans struggles to afford medications – and the situation is even more dire in Nigeria, where poverty and lack of insurance heighten financial burdens.

According to a pharmaceutical report, out-of-pocket expenditure in Nigeria can be as high as 62 percent of total healthcare expenditure, mainly due to limited access to health insurance. That means any increase in drug prices due to global market adjustments could disproportionately harm Nigerians, who may skip doses or forgo treatment altogether.

The US policy may also trigger supply chain disruptions. If drugmakers reduce production of certain drugs due to lower profits, global supply shortages could emerge, driving up prices for generics and essential medicines, especially for HIV, tuberculosis, and malaria, in Nigeria which relies heavily on imports.

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While the full impact remains uncertain pending the order’s implementation, the federal government may need to act proactively to safeguard access to affordable medications for millions of Nigerians.

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