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President Donald Trump on Monday signed a bold executive order aimed at slashing U.S. prescription drug prices, setting a 30-day deadline for pharmaceutical companies to lower prices or face new restrictions on what the federal government will pay for medications.
The order directs the Department of Health and Human Services, led by Secretary Robert F. Kennedy Jr., to negotiate price reductions with drugmakers. If those talks fail, the government will impose a “most favored nation” pricing model, pegging U.S. drug payments to the lower prices paid in other developed countries like Canada and those in Europe.
“We’re going to equalize,” Trump declared at a White House press conference. “We’re going to pay what Europe pays.”
The action revives and expands a controversial policy Trump first introduced in 2020, which was later blocked by federal courts and criticized for lacking transparency. That earlier plan tied Medicare reimbursement rates for certain drugs to lower international benchmarks, sparking intense pushback from the pharmaceutical industry.
This time, Trump is expanding the effort to cover a broader range of medications and has signaled a tougher stance.
Trump appeared alongside Kennedy, CMS Administrator Dr. Mehmet Oz, FDA Commissioner Dr. Marty Makary, and NIH Director Jay Bhattacharya — all vocal critics of pharmaceutical pricing practices. Trump warned that if companies do not comply, they will face federal investigations and possible competition from imported drugs.
The federal government, primarily through Medicare and Medicaid, is the largest buyer of prescription drugs in the country, spending hundreds of billions annually. Trump’s order could have sweeping implications for the 150 million Americans covered by those programs, though its effect on private insurance remains unclear.
Industry groups immediately criticized the move. Stephen J. Ubl, president of PhRMA, said in a statement:
“Importing foreign prices will cut billions from Medicare with no guarantee of benefit to patients. It jeopardizes future R&D and our ability to innovate.”
Trump dismissed those arguments, accusing drugmakers of overcharging Americans for years and blaming prior administrations for failing to act.
“They’ve said for years it was about R&D. But they made Americans foot the whole bill. That ends now,” Trump posted on Truth Social.
While he claims the executive order could save “trillions” in taxpayer dollars, no official cost analysis was provided by the White House. It’s also unclear how the administration will enforce pricing changes, particularly for drugs outside of Medicare and Medicaid.
CMS Administrator Dr. Oz said the agency would meet with pharmaceutical executives over the next month to hammer out fair pricing. If no agreements are reached, Trump promised to enact the price-capping rule unilaterally.
The executive order adds pressure to a drug industry already grappling with new Medicare price negotiations authorized by Congress in 2022. Under that law, the first 10 drugs eligible for price negotiation will be announced in 2025 — a milestone long resisted by industry lobbyists.
Though past attempts to lower U.S. drug prices have faltered in Congress, the U.S. remains a global outlier, spending far more per capita on prescription drugs than any other wealthy nation.
Trump’s move could revive broader debates about how the U.S. should approach pharmaceutical regulation, importation, and innovation.
