President Donald Trump said last week he is working on an executive order that would require drug companies to charge the U.S. government lower prices, comparable to what some other countries pay. He dubbed it a “favored nations” clause, something often seen in trade agreements, where the seller agrees to give the buyer the best price it gives any customer. There are few details about the proposal. But the president raised an interesting question: Why do some other countries, like Canada and Germany, currently get a better deal on drug prices than the U.S., and what can be done about it?

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