Trump orders U.S. to match lowest international prices for select prescription drugs
The executive order revives Trump’s “most favored nation” policy, aiming to reduce Medicare drug costs by aligning U.S. prices with those paid in other developed countries.
President Donald Trump announced a new executive order aimed at drastically reducing prescription drug prices in the United States. The measure, based on the "most favored nation" policy, seeks to align U.S. drug costs with the lowest prices paid globally, instead of remaining among the highest. Trump claimed that prices could drop between 50% and 90%, warning that if pharmaceutical companies do not comply within 30 days, the federal government will impose strict limits on what Medicare will pay for those drugs.
This initiative revives a similar proposal from Trump’s first term, which was blocked by the courts after his administration attempted to fast-track the policy without following proper regulatory procedures. The Biden administration later formally abandoned the plan and instead sought to lower drug costs through the Medicare Drug Price Negotiation Program, passed by Congress.
Trump revives drug price caps as U.S. Medicare spending hits $33B, proposes direct purchases from Manufacturers
A report from Trump’s first term revealed that the U.S. spends twice as much as other countries on Medicare-covered drugs. In 2021 alone, Medicare Part B drug spending exceeded $33 billion. The new version of the “most favored nation” proposal, according to the White House, will include developing new regulations to reinstate price caps in Medicare and introduce a new "mechanism" allowing Americans to buy drugs directly from manufacturers at those lower international prices.
The pharmaceutical industry has strongly opposed the initiative, arguing that it could stifle innovation and restrict patient access to new treatments. Nevertheless, Trump defended the executive order as a necessary move to ensure Americans pay fair prices for medications, stating that the U.S. can no longer subsidize the healthcare systems of other nations at its own citizens’ expense.
Trump revives drug price plan to cut U.S. prescription costs by up to 80% under 'most favored Nation' Policy
President Donald Trump announced his plan to sign an executive order aimed at reducing prescription drug prices in the United States by 30% to 80%. The initiative, known as the "most favored nation" policy, seeks to align U.S. drug costs with the lowest prices globally. Trump emphasized that this measure would ensure fair treatment for Americans and significantly cut healthcare expenses. The executive order is scheduled to be signed at 9 a.m. Eastern Time on Monday.
This policy revisits a similar proposal from Trump's first term, which was blocked by courts due to Medicare's lack of negotiating power at the time. That legal limitation was lifted by the Democrats' 2022 Inflation Reduction Act, which now allows limited Medicare negotiations. The earlier proposal was projected to save $85 billion over seven years but raised concerns about potential limitations on patient access to medications. The pharmaceutical industry is expected to resist the new initiative strongly.
Trump’s executive order aims to cut Medicare drug costs amid Bipartisan push for reform
The executive order targets drugs administered in doctors' offices, like cancer infusions, covered under Medicare Part B, which serves approximately 70 million older Americans. Trump claims the move could yield historic reductions in drug costs, although his estimates of savings in the trillions may be exaggerated. The measure is limited in scope and excludes most prescription drugs filled at pharmacies. Despite longstanding bipartisan concern over high drug prices, Congress has yet to pass comprehensive reform.
Critics, including The Wall Street Journal editorial board, argue the plan won't yield the projected Medicaid savings and could hinder pharmaceutical innovation and participation. Nonetheless, Senators Josh Hawley (R) and Peter Welch (D) have introduced a bipartisan bill supporting the concept, potentially collaborating with the administration on its legislative enactment.
Trump’s drug price order shakes Pharma stocks as Americans face triple the global costs
The announcement caused a decline in pharmaceutical company stocks, including those of Johnson & Johnson, Merck, Eli Lilly, and AbbVie, reflecting concerns over the potential revenue impact on the industry. A 2024 report highlighted that Americans pay roughly three times more for prescription drugs compared to consumers in other countries, underlining the significance of the proposed policy.
Donald Trump vows to end America's role as the world’s “sucker” on drug prices, announcing a sweeping executive order to slash pharmaceutical costs by up to 80% and enforce global price fairness. Photo: Donald Trump Truth Social account
While the Biden administration had earlier pursued drug price negotiations via the Inflation Reduction Act—targeting ten drugs and aiming to save $100 billion—the approach led to legal challenges from drugmakers. Trump dismissed industry criticisms, accusing pharmaceutical firms of misleading Americans about research costs and exploiting them financially. He emphasized that his decision is not influenced by campaign contributions and aims to bring fairness to American consumers.
