On May 12, 2025, President Donald Trump signed an executive order aimed at reducing U.S. prescription drug prices by aligning them with lower prices paid in other developed countries, reviving his “most favored nation” pricing policy.
Trump claimed this would cut drug prices by 59% or more, potentially up to 80% or 90%, citing the disparity where U.S. prices are two to three times higher than in other nations.
— Donald J. Trump (@realDonaldTrump) May 12, 2025
The order sets a 30-day deadline for drugmakers to voluntarily lower prices or face potential regulatory actions, such as tying government payments to international prices, increasing drug importation, or reviewing FDA approvals.
However, experts and analysts express skepticism about the policy’s feasibility and impact. The order lacks specific legal mechanisms to enforce price cuts, and similar efforts during Trump’s first term were blocked by courts following pharmaceutical industry lawsuits.
JPMorgan analysts noted implementation challenges, including the need for congressional approval and potential legal hurdles, especially after the 2024 Supreme Court decision limiting executive agency authority.
The pharmaceutical industry, represented by PhRMA, criticized the policy as a “bad deal” that could reduce Medicare funding without guaranteeing patient benefits. AARP, advocating for seniors, supported the move, highlighting the burden of high drug costs.
While Trump’s announcement caused an initial drop in pharmaceutical stocks, they later recovered as the order’s vague details and voluntary nature became apparent.
Health policy experts remain uncertain about which drugs would be affected, the extent of price reductions, and whether the policy can be practically implemented.