Trump to Sign Executive Order Targeting Prescription Drug Prices
On May 12, 2025, U.S. President Donald Trump announced plans to sign an executive order aimed at significantly reducing the cost of prescription medications for Americans. In a statement shared on Truth Social, Trump indicated that the measure would align U.S. drug prices with those paid by other high-income nations, asserting that the American public currently pays between 30% to 80% more for their medications compared to their international counterparts.
The Most Favored Nation Policy Explained
The proposed policy, dubbed the “most favored nation” pricing model—or international reference pricing—seeks to address the growing disparity in prescription drug costs. Currently, American consumers bear the brunt of some of the highest medication prices globally, often facing costs that are nearly three times greater than those experienced by residents of other developed countries. In his post, Trump emphasized the objective of bringing “FAIRNESS TO AMERICA,” suggesting that drug prices will need to elevate globally to align with this new U.S. pricing model.
Trump’s Strategy and Industry Expectations
The executive order is expected to focus on Medicare, the federal health insurance program primarily for individuals 65 and older, as suggested by several drug industry lobbyists who claim to have been briefed by the White House. According to insiders, this initiative could encompass a wider range of medications than those currently implicated under President Biden’s Inflation Reduction Act. This earlier law allows Medicare to negotiate prices for a select group of ten drugs, with price adjustments slated to come into effect in the upcoming year. The anticipation of broader negotiations this year pertinent to additional medicines has also emerged in discussions among industry experts.
Industry Pushback
Despite the proposed policy’s intent, vocal opposition from the pharmaceutical industry is already materializing. Alex Schriver, a spokesperson for the Pharmaceutical Research and Manufacturers of America (PhRMA), declared that “government price setting in any form is bad for American patients.” Schriver’s comments reflect a common argument within the industry that such policies may stifle innovation and limit access to new treatments for patients.
Historical Context: Reattempting International Pricing
This is not the first time that President Trump has sought to adjust U.S. drug prices in relation to international standards. During his previous term, a potential international reference pricing program was halted by a court ruling. That initiative was projected to save taxpayers upwards of $85 billion over a seven-year period while targeting the staggering annual expenditure of over $400 billion on pharmaceuticals in the U.S. However, the 2025 executive order represents a renewed commitment to pursuing drug pricing equality on a global scale.
The Impact on Patients and Future of Drug Pricing
Early indications suggest that the implementation of this “most favored nation” policy could lead to substantial changes in how Americans and pharmaceutical companies approach drug pricing. If such an order successfully lowers costs, it may ease financial burdens for patients in the U.S., possibly setting a precedent for further reforms in the healthcare industry. Conversely, the backlash from pharmaceutical companies hints at ongoing debates regarding the balance between affordability and innovation.
Conclusion
As President Trump prepares to sign this executive order, the implications for American patients and the pharmaceutical industry are significant. While the initiative is grounded in the desire for more equitable drug pricing, the actual implementation and its effects remain to be seen. Stakeholders—including policymakers, healthcare providers, and patients—will be closely monitoring the outcome of this legislative effort as it unfolds in the coming months.