President Donald Trump has signed a sweeping executive order aimed at slashing prescription drug prices in the United States by up to 80%. The order introduces a “most-favoured-nation” (MFN) pricing model, ensuring that Americans pay no more for medications than the lowest price available in comparable developed countries. Trump said the move was necessary to end the long-standing practice of American consumers subsidising both foreign healthcare systems and drug companies’ profit margins. “Starting today, the United States will no longer subsidise the healthcare of foreign countries… and we’ll no longer tolerate profiteering and price gouging from Big Pharma,” he said.What the executive order says:
Most-Favoured-Nation pricing : The order mandates that U.S. drug prices align with the lowest prices paid by other developed nations. Trump stated, “We are going to pay the lowest price there is in the world. Whoever is paying the lowest price, that is the price we’re going to get.”- 30-Day compliance window: Pharmaceutical companies have 30 days to voluntarily reduce drug prices. Failure to comply may result in regulatory actions, including the implementation of the MFN pricing model.
- Targeting middlemen: The order addresses the role of intermediaries like pharmacy benefit managers, whom Trump accuses of inflating drug costs. He emphasized the need to eliminate these “middlemen” to reduce prices.
- Drug importation: The administration plans to facilitate the importation of safe, lower-cost prescription drugs from countries like Canada, aiming to increase competition and drive down prices.
The White House executive order laid out the rationale starkly: with less than 5% of the global population, the United States funds nearly 75% of global pharmaceutical profits. The order directs officials to take “immediate steps to end global freeloading” and ensure that Americans are no longer forced to pay triple for the same medicines produced in the same factories abroad. Americans, Trump said, “deserve low-cost pharmaceuticals on the same terms as other developed nations.”The order also calls for enabling direct-to-consumer drug sales at the most-favoured-nation price and directs federal officials to pressure foreign governments and drugmakers to stop suppressing drug prices below fair market value. “We are going to do the right thing,” Trump insisted.
‘Bad deal for American patients and workers’
The pharmaceutical industry pushed back swiftly. Stephen J. Ubl, CEO of the powerful lobbying group PhRMA, called the plan a “bad deal” for American patients. “Importing foreign prices from socialist countries would be a bad deal for American patients and workers,” he said, warning it could result in fewer new treatments and job losses.“It really does seem the plan is to ask manufacturers to voluntarily lower their prices to some point, which is not known,” said Rachel Sachs, a health law professor at Washington University. If they don’t comply, further government action may take years to yield results.Trump’s plan revives a controversial idea first floated in his previous term, when a similar order tying U.S. drug prices to international benchmarks was blocked in court. While Republicans have historically been wary of government intervention in drug pricing, Trump appears determined to push forward. “For years, pharmaceutical and drug companies have said that research and development costs were ‘what they are’... And for no reason whatsoever, they had to be borne by America alone — not anymore they don’t,” he said.