Move Aims to Match U.S. Drug Costs to Lowest Global Prices, Targeting Medicare and Beyond

WASHINGTON, D.C. — President Donald Trump announced on Sunday that he will sign a groundbreaking executive order on Monday morning, May 12, 2025, designed to dramatically reduce prescription drug prices across the United States. The order, described by Trump as “one of the most consequential in our country’s history,” seeks to implement a “most favored nation” pricing policy, aligning U.S. drug costs with the lowest prices paid by other high-income countries, potentially cutting prices by 30% to 80%.

In a post on Truth Social, Trump emphasized the urgency of addressing the disparity in drug pricing, noting that Americans often pay nearly triple what other developed nations pay for the same medications. “They will rise throughout the World in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA!” he wrote, underscoring his goal to close the pricing gap. The executive order revives a controversial “most favored nation” policy from his first term, which was blocked by federal courts in 2020 and later rescinded by the Biden administration in 2021.

The directive is expected to instruct the Department of Health and Human Services (HHS), led by Secretary Robert F. Kennedy Jr., to pursue international reference pricing for a selection of drugs, particularly those covered by Medicare. While details remain sparse, the policy could extend beyond Medicare to impact other insurance programs, potentially affecting a broad range of prescription medications. The move builds on Trump’s earlier efforts to lower drug costs, including a 2020 proposal projected to save taxpayers over $85 billion over seven years.

However, the announcement has sparked mixed reactions. The pharmaceutical industry, represented by groups like the Pharmaceutical Research and Manufacturers of America (PhRMA), has voiced strong opposition, arguing that government price controls could stifle innovation and disrupt the healthcare market. “Government price setting in any form is bad for American patients,” said Alex Schriver, a PhRMA spokesperson. Critics also warn that drug companies might negotiate rebates with foreign governments to maintain higher U.S. prices, potentially undermining the policy’s effectiveness.

Supporters, however, see the executive order as a bold step toward addressing the high cost of prescription drugs, which has long been a pain point for American consumers. Posts on X reflect enthusiasm among some users, with one calling it a “huge story” and predicting significant savings for Americans. Others expressed skepticism, citing the complexity of implementing such a policy and the need for congressional cooperation to ensure lasting impact.

The executive order comes on the heels of Trump’s April 15, 2025, directive aimed at enhancing the Medicare Drug Price Negotiation Program, established under the Biden administration’s Inflation Reduction Act. That order sought to improve transparency, prioritize high-cost drugs, and align Medicare payments with hospital acquisition costs, which can be up to 35% lower. It also directed HHS to work with Congress to address the “pill penalty,” a policy that subjects small molecule drugs to price negotiations four years earlier than biologics, potentially discouraging investment in more affordable medications.

Industry analysts caution that the new order’s ambitious goals may face legal and logistical hurdles, similar to those that derailed Trump’s first-term efforts. The Biden administration’s negotiations under the Inflation Reduction Act achieved discounts of 38% to 79% on 10 high-cost drugs, with savings projected at $6 billion annually starting in 2026. Trump’s team has expressed confidence in surpassing these figures, but the lack of specific details has left some stakeholders wary.

As Trump prepares to sign the order, the administration is also navigating competing priorities, including proposed tariffs on pharmaceutical imports, which some experts warn could lead to drug shortages and price increases, potentially offsetting the order’s benefits. The White House has acknowledged that several provisions will require congressional approval, signaling a complex path ahead for the policy’s implementation.

The signing ceremony, scheduled for 9 a.m. ET, will mark a significant moment in Trump’s second-term healthcare agenda, with implications for millions of Americans reliant on prescription medications. As the nation awaits further details, the executive order has already reignited a heated debate over how best to balance affordability, innovation, and fairness in the U.S. healthcare system.