WASHINGTON — President Donald Trump signed an executive order Monday aimed at lowering drug prices by pressuring pharmaceutical companies to align their U.S. pricing models with those in similarly wealthy countries.
“We’ll slash the cost of prescription drugs and will bring fairness to America,” Trump said at a morning White House event. “We’re all gonna pay the same.”
The executive order, which the White House dubbed the “most-favored-nation” policy, gives pharmaceutical companies 30 days to negotiate lower drug prices with the government.
If no deal is reached in that time, Trump said a new rule will be set so that the United States will have a price model similar to the lower rates patients abroad pay. According to the executive order, Health and Human Services Secretary Robert F. Kennedy Jr. would be responsible for the rulemaking “to impose most-favored-nation pricing.”
“We are going to pay the lowest price there is in the world,” Trump said.
Prescription pricing for brand-name drugs in the U.S. is more than four times higher than in similar countries, according to a 2024 study by the nonpartisan research nonprofit RAND.
Clear price targets
A White House official previewing the policy in a background call with reporters Monday said the president will direct the Department of Commerce to “take all appropriate action” on countries that “suppress drug pricing abroad.”
The Food and Drug Administration will also consider expanding imports of pharmaceutical drugs from nations beyond Canada, the White House official said.
The White House official said Kennedy “will set clear targets for price reductions across all markets in the United States.”
Kennedy appeared at the White House alongside the president Monday morning.
“The United States will no longer subsidize the health care of foreign countries, which is what we were doing,” Kennedy said. “If the Europeans raise their price of their drugs by just 20%, that is tens of trillions that can be spent on innovation and the health of all people all across the globe.”
Trump said Monday the drug pricing policy would be included in the “one, big, beautiful,” reconciliation bill that is the top priority of congressional Republicans. The measure is also expected to provide tax cuts and a significant funding increase to border security.
Staff on the House Energy and Commerce Committee told reporters twice during a background briefing around the same time that most favored nation prescription drug pricing would not be in that reconciliation package.
First term
The order is similar to an effort the president made in his first term, which was struck down in federal court.
The White House official said Monday’s order is an expansion of those first-term efforts, which tried to apply the pricing model for those with Medicare – the health insurance program for those who are 65 or older and certain people under 65 who have disabilities – to 50 drugs.
“The expectation should not be that we will just be pursuing that same rulemaking,” a White House official said. “We have moved on from that for broader action.”
The pharmaceutical industry has long opposed such a move and is already bracing for the president’s planned tariffs on prescription drugs.
More details on specific actions in Medicare will be announced later, according to a White House official.
“We will be taking action in the Medicare program if the pharmaceutical companies do not come to the table and lower their prices across markets,” the White House official said.
