On May 12th, President Donald Trump revealed his big announcement that he had previously hinted at: with a new Executive Order aimed at lowering drug prices to match those of other developed nations. These announcements come soon before a new bill cutting funding to Medicare and Medicaid passes the House of Representatives.
Many European nations have lower drug prices since their governments pay for many of the drugs their citizens need, so they negotiate with pharmaceutical companies for lower prices. The United States does not have such a system in place, causing Americans to spend much more money on drugs than their overseas counterparts. The order is aimed to make European countries pay more and Americans pay less.
“The United States will no longer subsidize the healthcare of foreign countries,” the President explains. “I’m really more knocking the countries than the drug companies.”
Trump tried to institute a “Most Favored Nation” policy in his previous term with little success due to pressure from companies in the courts and opposition within the Republican party. His new order is not as forceful, yet its range is expected to include many more drugs than before. It also directs the Secretary of Health and Human Services Robert F. Kennedy Jr. and other officials to attempt to negotiate these price reductions. If these do not succeed, they are instructed to enforce a most favored nation policy 30 days after the order was signed. No clear legal way of implementing this is stated.
Many Democrats have advocated for lowering prescription drug prices, yet some are uneasy about the order. For example, Senator Peter Welch, a Democrat from Vermont, believes, “It’s really important to do this legislatively” because it is more permanent. He and Republican Senator Josh Hawley had introduced legislation to do so this month.
Trump’s deadline is currently approaching, yet there is no new information out yet.
- https://www.reuters.com/business/healthcare-pharmaceuticals/european-governments-scramble-interpret-trumps-new-drug-pricing-order-2025-05-14/
- https://www.nbcnews.com/health/health-news/trump-executive-order-prescription-drugs-price-match-rcna206218
- https://apnews.com/article/trump-prescription-drugs-prices-most-favored-nation-4c620a32ccd193b793ba1558f3fe93e0
- https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients/
- https://www.nytimes.com/2025/05/12/health/trump-drug-prices.html
