May 12, 2025 – WASHINGTON, D.C. — President Donald Trump is expected to sign an executive order Monday directing pharmaceutical companies to reduce prescription drug prices within 30 days, or face new rules tying U.S. prices to those paid in other countries.
The initiative, led by Health Secretary Robert F. Kennedy Jr., would impose a “most favored nation” policy — ensuring the U.S. pays no more than the lowest price charged globally for medications covered by Medicare.
Key Points of the Executive Order
- 30-day window for drugmakers to voluntarily lower prices
- If unmet, U.S. will adopt global benchmark pricing for covered medications
- Applies to Medicare, and potentially to Medicaid
- DOJ and FTC to explore enforcement actions on price manipulation
In a post on Truth Social, Trump said:
“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.”
Industry Pushback and Legal Precedents
The pharmaceutical industry quickly objected. Stephen J. Ubl, CEO of PhRMA, warned the policy could cut billions in Medicare spending while limiting drug innovation:
“Importing foreign prices will cut billions of dollars from Medicare with no guarantee that it helps patients… It jeopardizes the hundreds of billions our member companies are planning to invest in America.”
A similar order issued by Trump in 2020 was blocked in court. Critics argued it would allow foreign governments to dictate U.S. drug values.
Medicare’s Role in Drug Spending
The executive order primarily targets government healthcare programs:
- Medicare, which covers ~70 million seniors
- Medicaid, serving ~80 million low-income or disabled Americans
The federal government spends hundreds of billions annually on prescription drugs. However, drug prices for Americans with private insurance are less affected by executive action and harder to regulate directly.
Political Messaging and Future Action
Trump has consistently criticized high drug prices, accusing pharmaceutical companies of burdening American taxpayers.
“Pharmaceutical companies would say… all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, ALONE,” Trump wrote Sunday.
“We are going to do the right thing.”
He also emphasized that campaign contributions would not deter Republican efforts to address pricing reform.
