THE SLASHING OF U.S. PRESCRIPTION DRUG COSTS BY TRUMP

The executive order signed by President Donald J. Trump on May 12, 2025, aimed at addressing the high cost of prescription drugs in the United States by implementing a "most-favored-nation" pricing policy.

The U.S. funds approximately 75% of global pharmaceutical profits despite having less than 5% of the world’s population. Drug manufacturers charge significantly higher prices in the U.S. compared to other developed nations, subsidizing lower prices abroad. This order seeks to end this price discrimination and ensure Americans pay prices comparable to those in other developed nations.

Americans should not subsidize low-cost drugs for other countries and should have access to the "most-favored-nation" price (the lowest price offered to comparable developed nations). The administration will take steps to end "global freeloading" and may pursue aggressive actions if manufacturers do not comply.

The Secretary of Commerce and the U.S. Trade Representative are directed to ensure foreign countries do not suppress drug prices below fair market value, forcing Americans to bear disproportionate costs for global pharmaceutical R&D.

The Secretary of Health and Human Services (HHS) is tasked with facilitating programs allowing pharmaceutical manufacturers to sell directly to American consumers at the most-favored-nation price, consistent with existing laws.

Within 30 days, HHS, in coordination with other officials, will communicate price targets to manufacturers to align U.S. prices with those in comparable nations. If progress is insufficient, HHS may:

Propose rulemaking to enforce most-favored-nation pricing.

Certify that importing drugs from developed nations with lower prices poses no health risks and reduces costs, enabling case-by-case importation waivers under the Federal Food, Drug, and Cosmetic Act.

Pursue antitrust enforcement against anti-competitive practices by manufacturers.

Review drug exports contributing to global price discrimination.

Modify or revoke drug approvals if deemed unsafe, ineffective, or improperly marketed.

Agency heads will take additional actions to address price discrimination.

The order does not impair existing agency authority or the Office of Management and Budget’s functions.

Implementation is subject to applicable laws and available funding.

The order does not create enforceable rights or benefits against the U.S. government.

HHS will fund the publication of the order in the Federal Register.

The executive order reflects a policy to reduce U.S. prescription drug prices by leveraging the government’s purchasing power and addressing international price disparities. It builds on prior efforts (e.g., Executive Order 14273 from April 15, 2025) to prioritize American consumers in drug pricing.

https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients/