President Trump signs a bold new executive order to lower prescription drug prices in the U.S
WASHINGTON, D.C. – In a renewed effort to tackle the high cost of prescription drugs, President Donald Trump on May 12 signed an executive order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” aimed at bringing U.S. medication prices in line with those paid in other developed countries.
Key Provisions: Matching Global Prices
The executive order directs the U.S. Department of Health and Human Services (HHS) to implement a Most-Favored-Nation (MFN) pricing model, under which Medicare and other federal programs will pay no more for select prescription drugs than the lowest price charged in economically comparable countries such as Canada, France, or Germany.
The administration claims this pricing parity could cut drug costs by up to 90% for certain medications. Pharmaceutical companies are given 30 days to voluntarily reduce prices to meet MFN benchmarks. If they fail to comply, federal agencies may initiate regulatory enforcement, including formal rulemaking.
The order also calls on HHS to establish pathways for Americans to purchase drugs directly from manufacturers at MFN prices. The U.S. Trade Representative and Department of Commerce have been tasked with challenging foreign pricing practices that the administration argues contribute to inflated domestic costs.
Industry Reactions and Global Impact
The pharmaceutical industry has expressed significant concerns. Roche, headquartered in Switzerland, stated:
“Should the proposed Executive Order go into effect, Roche’s ability to fund the significant investments previously announced in the U.S. will be in question.”
This refers to Roche’s $50 billion investment in U.S.-based research and manufacturing announced in April 2025. The company warned the policy could disrupt innovation and job creation if global pricing limits reduce revenue.
PhRMA also issued a strong warning:
“Government price setting based on other countries’ prices is not the right solution for American patients. It would threaten access to medicines, discourage investment in new treatments and outsource decisions about the value of medicines to foreign governments.” (PhRMA Policy Brief)
Dr. Loren Adler of the USC-Brookings Schaeffer Initiative noted:
“While unfortunately there does not appear to be any research to date testing for the presence of cost-shifting by drug companies empirically… researchers can empirically test for cost-shifting in the drug pricing context.”(Brookings)
This indicates speculation about companies raising international prices remains unproven.
Legal and Implementation Questions
Experts caution the executive order may face legal challenges. A similar MFN initiative in 2020 was blocked in federal court over procedural and executive overreach concerns.
Prof. Rachel Sachs, Washington University in St. Louis, stated:
“It really does seem the plan is to ask manufacturers to voluntarily lower their prices to some point, which is not known… HHS shall take other actions with a very long timeline.” (AP News)
Sachs and other legal scholars emphasize the difficulty of implementing sweeping drug pricing reform without congressional backing.
A Return to Trump-Era Healthcare Strategy
The order contrasts with Biden-era legislative approaches, such as Medicare Part D reforms and the Inflation Reduction Act. Trump’s strategy reasserts executive power to push for price controls.
While no specific quote was offered in the official May 12 transcript, the White House emphasized the urgency of addressing high drug costs.
President Trump stated at the signing:
“No American should have to choose between buying groceries or paying for medication.”
A Bold Promise, With Hurdles Ahead
The May 12 order shows Trump’s determination to deliver immediate relief on drug prices. But success depends on drugmaker cooperation, regulatory clarity, and legal viability.
