Unveiling the Mystery Behind Trump’s Prescription Drug Pricing Order

President Trump signed an executive order aimed at slashing prescription drug prices by 30-80%, forcing pharmaceutical companies to offer Americans the same low prices they give other nations.

Quick Takes

Trump’s “Most-Favored-Nation” policy will require Medicare to pay the same prices for drugs as the lowest-paying developed nations globally.
The order primarily targets expensive medications administered in doctors’ offices, including cancer treatments and injectable drugs.
Americans currently fund about 75% of global pharmaceutical profits despite having less than 5% of the world’s population.
HHS Secretary Robert F. Kennedy Jr. will establish mechanisms for Americans to buy directly from manufacturers at the lowest international prices.
Pharmaceutical companies face regulatory action if they fail to comply with the new pricing requirements.

America First Pricing for Prescription Drugs

President Donald Trump has taken decisive action against high prescription drug prices by signing an executive order titled “DELIVERING MOST-FAVORED-NATION PRESCRIPTION DRUG PRICING TO AMERICAN PATIENTS.” The order aims to dramatically reduce the cost of medications by ensuring Americans pay no more for prescription drugs than citizens of other developed nations. This policy could potentially cut prices for some medications by 50-90%, bringing immediate relief to millions of seniors and others struggling with high drug costs. The measure specifically targets Medicare Part B drugs, which include expensive treatments administered in doctors’ offices such as cancer medications and injectable therapies.

The executive order directly challenges what Trump and his administration describe as unfair pricing practices by pharmaceutical companies. For years, Americans have paid substantially more for the exact same medications than patients in other countries. Medicare Part B alone spent over $33 billion on drugs in 2021, with prices significantly higher than those in other developed nations. Under the new policy, pharmaceutical companies will be required to offer their products to Americans at the same price they charge in the country where they sell for the least.

Americans pay three times more for prescription drugs than patients in other wealthy countries. That ends now.

Today, President Trump signed an Executive Order to demand Most-Favored-Nation pricing — no more gouging Americans to subsidize foreign governments.

I stand with… pic.twitter.com/FuZQcDG6cR

— Secretary Kennedy (@SecKennedy) May 12, 2025

Ending Foreign Subsidies with American Dollars

A core principle behind Trump’s order is stopping what his administration views as American subsidization of other countries’ healthcare systems. Currently, the United States funds approximately three-quarters of global pharmaceutical profits despite having less than 5% of the world’s population. This disparity has effectively meant that American patients pay premium prices that subsidize lower drug costs in foreign markets. The executive order aims to end this practice by ensuring Americans receive the benefit of the lowest international prices.

Health and Human Services Secretary Robert F. Kennedy Jr., who joined Trump for the signing, expressed strong support for the measure. Kennedy has been a vocal critic of pharmaceutical industry practices and praised Trump for taking on powerful drug companies. Under the executive order, Kennedy will be responsible for establishing a mechanism allowing Americans to purchase medications directly from manufacturers at “Most-Favored-Nation” prices. If companies refuse to comply, the Secretary is directed to propose rules and take measures to reduce costs and eliminate anticompetitive practices.

Industry Opposition and Implementation Challenges

The pharmaceutical industry is expected to mount significant opposition to the executive order, as it did when Trump attempted to implement a similar policy during his first term. Industry representatives argue that such price controls could harm innovation and reduce investment in new drug development. Trump’s previous attempt was ultimately blocked by court orders citing procedural issues, and the Biden administration later abandoned the proposal in 2022, referencing both the court challenges and stakeholder concerns. This time, the administration appears prepared for potential legal battles.

The White House has indicated it plans to address potential workarounds that pharmaceutical companies might employ to maintain their pricing structures. This includes ensuring fair market practices internationally and preventing companies from simply raising prices in other markets to manipulate the reference point. While the executive order is expected to generate significant savings for both Medicare and patients with high out-of-pocket costs, the exact financial impact remains unclear. Implementation will require careful monitoring to ensure drug manufacturers comply with both the letter and spirit of the new requirements.