Trump Targets Soaring Drug Prices with Executive Order

On May 12, 2025, U.S. President Donald Trump signed a sweeping executive order aimed at drastically reducing prescription drug prices nationwide. The measure gives pharmaceutical companies 30 days to voluntarily lower their prices; otherwise, new regulations will be enacted to align U.S. prices with those paid by other developed countries.

The order instructs the Department of Health and Human Services, led by Robert F. Kennedy Jr., to negotiate reduced prices with drug manufacturers. Should negotiations fail, Kennedy will be tasked with developing a pricing rule linking government payments to the lowest prices paid abroad.

This proposal revives Trump’s previous “Most Favored Nation” pricing policy, which he pushed during his first term. The approach aims to ensure Americans aren’t paying more for medications than citizens in Europe or Canada. Legal experts, however, foresee regulatory and judicial hurdles, questioning whether the federal government has the authority to implement international pricing standards without congressional approval—especially with regard to drug imports.

The pharmaceutical industry has voiced strong opposition. Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), argued that “importing socialist country prices is bad policy for American patients and workers.” Companies fear the new order could discourage investment in innovative therapies.

Despite the backlash, the Trump administration maintains that such reforms are necessary to address the long-standing issue of high drug costs. Studies show that U.S. patients pay, on average, three times more for medications than patients in other wealthy nations.

The executive order also proposes allowing direct international drug purchases by consumers and the use of tariffs on pharmaceutical imports if companies fail to comply.

In short, Trump’s executive order represents a bold attempt to reshape how drug prices are set in the United States. Its effectiveness will hinge on the administration’s ability to overcome legal and logistical barriers while balancing affordability and innovation.