President Donald Trump signed a sweeping executive order Monday designed to lower prescription drug prices in the United States by implementing what he called a “most favored nation’s policy,” a move that would require pharmaceutical companies to sell drugs to Americans at the same prices offered in other wealthy countries.
The order marks a bold attempt to tackle long-standing disparities in drug prices between the U.S. and nations with nationalized or single-payer health care systems. While similar efforts during Trump’s first term were blocked in court, the new directive is broader in scope and not limited to Medicare Part B drugs. It applies to all prescription medications with significant price gaps between U.S. and foreign markets.
“What’s been happening is we’ve been subsidizing other countries throughout the world,” Trump said before signing the order. “Our country pays the highest drug prices anywhere — by five, six, seven, even eight times in some cases.”
The executive order directs several agencies, including the Department of Health and Human Services (HHS), the U.S. Trade Representative, and the Department of Commerce, to pressure foreign governments to raise what they pay for American drugs — effectively shifting some of the cost burden abroad. Trump argues this strategy will lower prices at home without directly imposing price controls domestically.
Health and Human Services Secretary Robert F. Kennedy Jr., a noted critic of the pharmaceutical industry, is tasked with setting reduction targets within 30 days. The Food and Drug Administration will also be evaluating expanded importation of prescription drugs from developed countries beyond Canada.
The administration says the plan is not traditional price fixing, but rather a market correction. “We’re fixing the market, not imposing prices,” a White House official explained during a press call. “This creates a fairer system where the U.S. is no longer footing the bill for pharmaceutical innovation while other countries pay bargain prices.”
Critics say the executive order is likely to face legal challenges similar to those that derailed Trump’s earlier attempt. In that case, a federal court ruled the administration had skipped necessary administrative procedures in implementing Medicare drug pricing rules.
The order comes amid renewed political attention to health care costs as the House Energy and Commerce Committee prepares to debate a larger bill that could include Medicaid work requirements and cost-saving reforms to support other Republican priorities like tax cuts and border enforcement.
Trump’s announcement is also a pointed political play. High prescription drug prices are a consistent concern among voters across party lines. Democrats have long campaigned on the issue, with the 2022 Inflation Reduction Act having previously capped insulin costs at $35 per month for seniors. Trump is now attempting to recast Republicans as champions of price relief — without, as he argues, resorting to “socialist” solutions.
This effort comes despite his vocal criticism of Vice President Kamala Harris’s 2024 campaign pledge to ban grocery store price gouging — a move Trump denounced as “Communist” and “fascist.” When pressed on the apparent contradiction, administration officials insisted there’s a difference between punishing U.S. companies and pushing foreign countries to pay their “fair share.”
“This isn’t the government stepping in to cap profits,” the White House official said. “This is the government using its leverage to stop Americans from being ripped off.”
Still, questions remain about enforcement. The order calls for voluntary compliance from pharmaceutical companies within 30 days but does not lay out specific penalties for non-compliance. Industry groups have already signaled potential legal pushback, citing concerns about international trade disputes and disruption to research and development funding.
Whether Trump’s order can survive the courts or international objections remains to be seen. But as his second term advances and attention turns to governance, the move is a high-profile attempt to deliver on a long-standing promise — to bring American drug prices in line with the rest of the developed world.
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