Trump talks to reporters at the White House Friday. Photo: Alex Wong/Getty Images

President Trump told reporters Friday that he plans to issue an executive order creating a "favored nations clause," where the U.S. would pay no more for a drug than the lowest price paid by another country.

Why it matters: There are a lot of details that are unclear, such as how the order would be enforced and how much of a difference it would make. But it's a sign that Trump wants to use his executive authority to move ahead on his campaign promise to lower drug prices — and a bad sign for drug companies.

Transcript of Trump's remarks, per the White House pool report:

"We're going to be announcing something very shortly, a favored nations clause. As you know, for years and years other nations paid less for drugs than we do. Sometimes by 60-70 percent.

"We're working on it right now, we're working on a favored nations clause, where we pay whatever the lowest nation’s price is.

"Why should other nations — like Canada — but why should other nations pay much less than us. They've taken advantage of the system for a long time, pharma. 

"But we're working on right now a favored nations clause, so that whatever the lowest nation is anywhere in the world, or company, but the lowest nation or company, then what happens is, we will pay that amount. And that’s being worked on right now. We're gonna do it in the form of an executive order."

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