Trump Executive Order Aims to Reduce Prescription Drug Prices for US Patients

An executive order signed by United States President Donald Trump on May 12, 2025 is designed to reduce prescription drug prices for Americans, bringing the prices in line with those paid by similar nations. Among other stipulations, the order directs the Secretary of Health and Human Services (HHS) to establish a mechanism by which US patients can buy drugs directly from manufacturers who sell at a “most favored nation” price, bypassing middlemen (1).

“In case after case, our citizens pay massively higher prices than other nations pay for the same exact pill, from the same factory, effectively subsidizing socialism aboard [abroad] with skyrocketing prices at home,” Trump said in a Fact Sheet provided by the White House (1). “So, we would spend tremendous amounts of money in order to provide inexpensive drugs to another country. And when I say the price is different, you can see some examples where the price is beyond anything—four times, five times different.”

Government agencies authorized to act

Further directions given in the order include directing the US Trade Representative and Secretary of Commerce to take measures to ensure foreign countries are not unfairly or purposefully undercutting market prices, therefore driving price hikes in the US (1). The Trump administration also plans to communicate price targets to pharmaceutical manufacturers with the goal of securing the best deal for the US, which is both the world’s largest funder and purchaser of prescription drugs.

If drug manufacturers fail to offer most favored nation pricing—within 30 days, as an Associated Press report specified—the HHS Secretary would be authorized to propose rules that impose such pricing, and take other “aggressive measures” to significantly reduce prescription drug costs and end anticompetitive practices (1,2). What specific measures the Commerce or HHS departments might potentially take under these circumstances were not elaborated upon in the order.

A Reuters report said that Trump is hoping to cut the prices that US taxpayers pay for prescription drugs by at least 59% (3,4). According to the Fact Sheet, the executive order builds on actions taken by Trump during his first term in office to reduce domestic drug price disparities but now expands those efforts by including Medicaid in addition to Medicare (1).

However, the order came on the same day that the Republican-led US House of Representatives rolled out a plan to trim $880 billion from Medicaid (5).

Forecasting pharma impacts

Social media reacted swiftly to news of the executive order.

“This is as disastrous as it gets for biopharma,” John Carroll, founder of Endpoints News, wrote on X/Twitter. “Pure chaos. So, everybody is OK with that? Most favored nation pricing is cyanide to Big Pharma.”

Also commenting on X/Twitter was BiotechTV founder Brad Loncar: “Pharma [companies] should publicly embrace MFN [most favored nation pricing] generally because getting foreign countries to pay a higher share is obviously a good thing, but more important, pharma is so hated that being viewed as a team player rather than obstructionist needs to be the industry’s new modus operandi.”

In 2022, former President Joe Biden signed the Inflation Reduction Act into law, allowing the government to bypass pharmacy benefit managers and negotiate prices directly for several drugs covered by Medicare Part B and Part D that cost the most to patients living in the US; however, the Trump administration said in its May 12 Fact Sheet that Biden’s efforts to “beat Medicare” resulted in drug prices that were, on average, 78% higher than in 11 comparable countries (1,4).

References

1. The White House. Fact Sheet: President Donald J. Trump Announces Actions to Put American Patients First by Lowering Drug Prices and Stopping Foreign Free-Riding on American Pharmaceutical Innovation. WhiteHouse.gov, May 12, 2025.
2. Seitz, A. and Kim, S. M. Trump Signs Executive Order Setting 30-Day Deadline for Drugmakers to Lower Prescription Drug Costs. APNews.com, May 12, 2025.
3. Holland, S.; Erman, M.; and Wingrove, P. Trump Executive Order Demands Pharma Industry Price Cuts. Reuters.com, May 13, 2025.
4. Bonavitacola, J. Trump Executive Order Could Reduce Pharmaceutical Costs by 59%. AJMC.com, May 12, 2025.
5. Mascaro, L. House Republicans Unveil Medicaid Cuts That Democrats Warn Will Leave Millions Without Care. APNews.com, May 12, 2025.