Trump Signs Executive Order to Lower Prescription Drug Prices in the US

Strategic Insights -

President Donald Trump signed an executive order aimed at pressuring pharmaceutical companies to align their U.S. pricing models with those in similarly wealthy countries. The "most-favored-nation" policy gives pharmaceutical companies 30 days to negotiate lower drug prices with the government. If no deal is reached, the US 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. will be responsible for the rulemaking to impose most-favored-nation pricing.

The policy is intended to address the issue of prescription pricing for brand-name drugs in the US, which is more than four times higher than in similar countries, as reported by a 2024 study by the nonpartisan research nonprofit RAND. The executive order also directs the Department of Commerce to take action on countries that suppress drug pricing abroad and considers expanding imports of pharmaceutical drugs from nations beyond Canada.

Key Takeaways:

  • The executive order requires pharmaceutical companies to negotiate lower drug prices with the government within 30 days.
  • If no deal is reached, the US will have a price model similar to the lower rates patients abroad pay.
  • The policy aims to address the issue of high prescription drug prices in the US, which is more than four times higher than in similar countries.
  • The executive order directs the Department of Commerce to take action on countries that suppress drug pricing abroad.
  • The US will consider expanding imports of pharmaceutical drugs from nations beyond Canada.
  • Health and Human Services Secretary Robert F. Kennedy Jr. will be responsible for the rulemaking to impose most-favored-nation pricing.
  • Former President Joe Biden issued an executive order to direct the FDA to work with states to import prescription drugs from Canada.
  • The policy will be included in the "one, big, beautiful" reconciliation bill, which will also provide tax cuts and additional funding for border security.
  • The pharmaceutical industry has long opposed such a move and is already bracing for the president's planned tariffs on prescription drugs.

Statistics:

  • Prescription pricing for brand-name drugs in the US is more than four times higher than in similar countries (RAND study, 2024).
  • 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 (Robert F. Kennedy Jr.).
  • The US currently subsidizes the healthcare of foreign countries by pricing prescription drugs higher than in similar countries.
  • The executive order gives pharmaceutical companies 30 days to negotiate lower drug prices with the government.

Sources:

  • [https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients/](https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients/)
  • [https://www.whitehouse.gov/fact-sheets/2025/05/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/](https://www.whitehouse.gov/fact-sheets/2025/05/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/)
  • [https://www.rand.org/news/press/2024/02/01.html](https://www.rand.org/news/press/2024/02/01.html)
  • [https://www.kff.org/health-costs/issue-brief/faqs-on-prescription-drug-importation/](https://www.kff.org/health-costs/issue-brief/faqs-on-prescription-drug-importation/)