Trump signs sweeping executive order to cut US drug prices by ‘up to 90%’
Title
Trump Signs Sweeping Executive Order to Slash U.S. Drug Prices by Up to 90%
Keywords
- Trump executive order
- U.S. drug prices
- prescription drug costs
- most favored nation pricing
- pharmaceutical industry
- Medicare and Medicaid
- Health and Human Services (HHS)
- pharmaceutical price negotiation
- medication imports
- drug price reduction policy
Key Facts
- President Donald Trump signed a sweeping executive order on May 12, 2025, aiming to reduce U.S. prescription drug prices by up to 90%3.
- The order implements a "most favored nation" (MFN) policy, requiring drug prices paid by the U.S. government to match the lowest prices paid by any economically advanced country3.
- Drugmakers have a 30-day deadline to negotiate new, lower prices with the Department of Health and Human Services (HHS); if negotiations fail, the government will implement limits tying U.S. drug costs to international benchmarks23.
- If drugmakers do not comply, the HHS has the authority to enforce target prices or initiate rulemaking to impose MFN pricing13.
- The new policy covers Medicare and Medicaid, which together insure nearly 150 million Americans, though its immediate effect on the privately insured remains unclear23.
- The pharmaceutical industry strongly opposes the order, warning it could cost them up to $1 trillion over a decade and potentially hinder research and development of new drugs12.
- Previous iterations of similar policies have faced legal challenges from pharmaceutical companies, and experts expect significant resistance and potential litigation to this new executive order13.
- The order also hints at expanding medication imports beyond Canada and considers export restrictions as further means to control drug costs1.
- The executive order's details and implementation timeline remain vague, leaving its ultimate impact subject to further regulatory action and likely court battles3.
Sources:
1. https://www.ajmc.com/view/trump-executive-order-could-reduce-pharmaceutical-costs-by-59-
2. https://www.latimes.com/science/story/2025-05-12/trump-executive-order-30-day-deadline-for-drugmakers-to-lower-prices
3. https://www.fiercepharma.com/pharma/trump-signs-sweeping-executive-order-cut-price-drugs-us-90