President Donald Trump on Monday signed an executive order aimed at cutting prescription drug costs in the United States by aligning them with the lowest prices paid in any other country. Trump described the move on Truth Social as “one of the most consequential Executive Orders in our Country’s history,” claiming it would lower drug prices “almost immediately, by 30% to 80%.”
“Our nation will no longer pay more than the Nation that pays the lowest price anywhere in the World,” he wrote on Sunday night.
The measure is modeled on the “most favored nation” approach, a pricing framework that Trump first tried to introduce during his initial term in office. That earlier version was blocked by a federal judge on procedural grounds. The goal remains the same, namely to bring U.S. drug prices in line with those paid abroad, particularly under public health programs.
In the U.S., prescription medications cost roughly three times more on average than in countries with public healthcare systems. For commonly used treatments like Metformin, Lisinopril and Losartan, U.S. prices significantly exceed those in the United Kingdom. Although the list prices may appear close in some cases, the NHS caps patient costs at £9.90 per prescription, currently about $13.
Trump called the disparity “very embarrassing and difficult to explain,” blaming pharmaceutical companies for passing their R&D costs onto American consumers. “The ‘suckers’ of America, ALONE,” he said.
It is not yet known what government programs or drugs will be included. The initiative proposed during Trump’s first term that was eventually rejected on procedural grounds had targeted 50 drugs covered by Medicare Part B, which reimburses treatments administered in clinics or doctors’ offices.
The new executive order, by itself, does not alter federal law. Implementation would likely require congressional action and is expected to face legal challenges. Analysts say only a small portion of drugs would be affected, mostly expensive cancer infusions and injectables given in outpatient settings. It is not expected to change prices for medications filled at retail pharmacies. Still, federal savings could be significant. Medicare Part B spent more than $33 billion on such drugs in 2021 alone.
The pharmaceutical industry was quick to respond. PhRMA, the sector’s leading lobbying group, announced plans to fight the order. “Government price setting in any form is bad for American patients,” said PhRMA spokesperson Alex Schriver. “Policymakers should focus on fixing the flaws in the U.S. system, not importing failed policies from abroad.”
Stephen J. Ubl, PhRMA’s president and CEO, added, “Importing foreign prices will cut billions of dollars from Medicare with no guarantee that it helps patients or improves their access to medicines.”
Trump’s announcement immediately rattled global markets. In London, AstraZeneca and GSK fell 5 percent and 3.2 percent, respectively. In Copenhagen, Novo Nordisk dropped 7.5 percent. Roche lost 3.6 percent in Zurich, while BeiGene in Hong Kong declined nearly 9 percent.
Japan’s pharmaceutical index slid more than 4 percent. In South Korea, SK Biopharmaceuticals and Samsung Biologics fell between 2 and 5 percent. Major Indian drugmakers also saw declines across the board.
Industry executives warn the new pricing model could hurt margins and dampen innovation, especially at a time when Europe is already struggling to attract investment. Companies like Novartis, Roche, Johnson & Johnson, and Gilead Sciences have recently committed to expanding production in the U.S., partly in response to Trump’s threat of tariffs on imported drugs.
Trump, meanwhile, took aim at pharmaceutical lobbyists. “Campaign Contributions can do wonders, but not with me, and not with the Republican Party,” he wrote. “We are going to do the right thing, something that the Democrats have fought for many years.”
