President Donald Trump revived a controversial policy on Monday that aims to reduce the drug costs by giving the prices of some medicine together in the United States to the significantly lower abroad.
Trump signed an executive order with several different measures to renew these efforts, which is known as the “most preferred nation” policy. However, he did not refer to certain nations, but signaled that he would address other industrialized countries because “there are some countries that need additional help, and that's okay.”
“Basically, it is the balance,” said Trump on Monday during a press release. “We will pay the lowest price in the world. We will get the one who pays the lowest price. This is the price we will get.”
Officials of the White House have not disclosed the medication for which the order applies, but they will affect the commercial market as well as on Medicare and Medicaid. They said that the announcement on Monday will be wider than a similar policy that Trump tried during his first term that was only faced with Medicare Part B.
Officials added that the administration will have a special focus on medication that has the “biggest differences and greatest expenses” that could possibly include weight loss and diabetes treatments as GLP-1 medication.
It is unclear how effective the guideline meets with the reduction of the costs for patients. In a social media contribution on Monday, Trump claimed that drug prices were “59%, plus!”
But Trump claimed during the press event that drug prices could fall even more, between 59%and 80%or “I even think 90%”.
Some Wall Street analysts and other experts also questioned whether the directive can be implemented.
In a note on Monday, JPMorgan analysts described the guideline as “challenging to implement”, since it could probably require the consent of the congress and could encounter legal hurdles.
It is Trump's latest efforts to contain the US prescription medication prices that are on average two to three times higher than that in other industrialized nations – and up to 10 times more than in certain countries, according to the Rand Corp., a think factory for public order.
In an explanation on Monday, the largest lobby group in the pharmaceutical industry, Phrma, Trump praised the fact that they aimed at other nations “not to pay their fair share”.
Nevertheless, Stephen Ubl, CEO of Phrma, said “foreign prices from socialist countries import a bad business for American patients and employees”, as this would impair the ability of the industry to bring new treatments to them. Some experts said that the order in court could face the challenges of the pharmaceutical industry.
Despite the order, the stocks of the US drug manufacturers rose on Monday. MerchantThe stock added more than 4% Pfizer And Amgen rose by more than 2%
Aarp, who is committed to older Americans, thanked Trump for granting the order in a statement on Monday.
“Large pharmaceutical companies have demolished the seniors of America for too long – the highest prices in the world for life -saving recipes, their profits at the expense of American life and force older adults to skip medication that they cannot afford,” said Aarps main representation and engagement officer Nancy Leamond.
How Trump's drug price order will work
President Donald Trump, together with the secretary for health and human services, Robert F. Kennedy Jr., speaks during a press conference in the Roosevelt Room of the White House on May 12, 2025 in Washington, DC.
Andrew Harnik | Getty pictures
Part of the order is a goal for nations abroad that have more power to negotiate pharmaceutical prices with pharmaceutical companies.
“As of today, the United States will no longer subsidize health care abroad,” said Trump, adding that the United States “will not tolerate a BIG Pharmaceutical Equipment and Price Equipment”.
He added that “it was really the countries that forced Big Pharma to do things that are honestly not sure whether they really felt comfortable.”
The order indicates the office of the US trade representative and the Ministry of Commerce, abroad, which “suppress” drug prices abroad, “inappropriate and discriminatory politics” abroad, the civil servants.
“We will work to ensure that the countries are not unfair in their negotiations with pharmaceutical companies, right?” An official said. Drug makers “constantly” complain when they are put in an unsustainable situation in these negotiations “because these companies usually have to convey drug discounts with entire countries, the official added.
In contrast to the United States, several foreign countries offer universal health insurance, in which the government is the only payer that offers significant influence on the negotiation or determination of drug prices.
Officials of the White House said that they expect drugmakers all along the line to grant discounts to “reply” the measures that the Trump administration take to combat prices abroad.
Trump's command also instructs the secretary of the Ministry of Health and Human Services to create a way for US patients to buy their medication directly from manufacturers at most preferred prices, whereby the intermediate traders are handling.
“We will make the middlemen out and make the direct sale of drugs easier for the most popular price of the nation directly to the American citizen,” said Trump.
According to the officials, the secretary must also set clear goals for price reductions in all markets in the USA within 30 days. This will open a round of negotiations between HHS and the pharmaceutical industry, officers said without giving precise details about the type of these conversations.
If “appropriate progress” is not achieved in relation to these price goals, HHS secretary Robert F. Kennedy Jr. will impose the most preferred pricing for drugs through rules.
The order also indicates the Food and Drug Administration to consider the expansion of imports from other industrialized nations beyond Canada. In April, Trump signed a separate executive regulation in which the FDA was cited to improve the process, among other things, the import of more cost -effective medicines from Canada, among other things, to reduce drug prices.
The arrangement on Monday is also headed by the Commission for Ministry of Justice and the Federal Trade to aggressively enforce “competitive measures” that keep prices in the USA
The Ministry of Commerce will also consider export restrictions that “enable refueling and this low pricing abroad”.
The effects on patients, companies
Drug manufacturers have argued that the most preferred nation policy would affect their profits and ultimately their ability to research and develop new medication.
The White House officials stated that pharmaceutical companies will continue to earn money after the price reductions if they realize that the USA “will not pay for innovation alone” and if they increase prices abroad to achieve additional income there.
Drug makers “should complete business where they are financially rewarded, according to the value they offer other nations, health systems,” said one civil servant.
“Other countries should also pay for research and development. It is to their advantage,” added Trump on Monday.
The industry also campaigned against similar Trump plans during its first term. In the past few months of this term of office, he tried to enforce the directive, but a federal judge stopped the efforts for a lawsuit from the pharmaceutical industry. The bidges then raised this policy.
Officials of the White House initially urged the Republicans of the Congress to include a most preferred nation in the most important reconciliation law that they would like to say goodbye in the coming months, but politics would have expressly targeted Medicaid drug costs at the beginning of this month. Several GOP members rejected this measure.
The largest trading group in the industry, Phrma, estimated that Trump's Medicaid proposal could cost drug manufacturers up to 1 trillion dollar over a decade.
Some of the health policy experts said that a most preferred drug policy may not be effective when lowering the medication costs.
For example, USC experts said that politics “cannot reverse the basic economy of the global drug market”, with 70% of the pharmaceutical profits come from the USA worldwide
“Before choosing between the deep cuts of their US prices or the loss of weakly profitable oversee markets, we can expect that many companies will pull out of the markets from overseas on their earliest opportunity,” said experts in a report in April.
As a result, the Americans pay the same amount for medication, pharmaceutical manufacturers with lower profits and future generations of patients with less innovation.
“Overall, everyone loses,” said the experts.
Even though the drug industry Trump's executive order pushes back in court, his government still has an instrument to reduce drug prices: Medicare drug price negotiations.
This is an important provision of the Inflation Reducation Act, which gives Medicare the authority to negotiate certain prescription drug prices for the first time in history with the manufacturers.
Trump proposed a change in politics last month that drug manufacturers have been looking for for a long time. The legislator on both sides of the aisle could be receptive to the idea that propagates changing rules that distinguish between drugs with small molecules and biological drugs.
Trump said last week he was planning to announce tariffs for medication that was imported to the USA over the next two weeks. These planned taxes aim to increase the production of domestic medication.
Drug makers, including Eli Lilly And PfizerPress these potential duties back. Some companies have questioned whether the tariffs are necessary, since some of them have announced new US production as well as research and development investments since Trump took office.
Nevertheless, Trump doubled the efforts to redesign drug production last week. He signed an executive order that optimizes the path for drug manufacturers for the construction of new production locations.
