On May 12, 2025, President Trump, joined by Dr. Mehmet Oz, head of the Centers for Medicare & Medicaid Services, and Health and Human Services Secretary Robert F. Kennedy Jr., signed an executive order at the White House aimed at addressing prescription drug costs.
The previous evening, Trump had posted on Truth Social, describing the upcoming order as one of the most significant in U.S. history, promising drug price reductions of 30% to 80%. He cited a “Most Favored Nation’s Policy,” intended to align U.S. drug prices with those of the lowest-paying countries globally.
However, the signed order did not include such binding measures.
According to reports, the executive order lacks the legal power to force price cuts, instead encouraging pharmaceutical companies to lower prices voluntarily — or risk future regulatory action or the possibility of drug importation from abroad. The order also instructed federal agencies to pressure European countries to pay more for medications, a move seen as a partial victory for the pharmaceutical industry, which had feared more aggressive reforms.
Speaking from the Oval Office, Trump criticized the current system, noting that drug companies disproportionately profit from American consumers. Experts agree, citing that U.S. residents pay nearly three times more for brand-name drugs than citizens in other countries, despite the U.S. playing a major role in drug development — often funded by public money.
While pharmaceutical companies argue that high U.S. prices fund faster innovation and access, Trump’s administration framed the issue differently, accusing drug makers of resisting fair pricing negotiations domestically while accepting lower prices abroad. Unlike most countries, the U.S. lacks a central system to negotiate drug prices, leading to inflated costs.
Trump, unlike many in his party, has supported federal intervention in drug pricing, including a similar “most favored nation” initiative in 2023 that was later blocked by the courts. His latest order revives that vision but without enforceable provisions — at least for now. Instead, it tasks the Department of Health and Human Services with negotiating lower prices within 30 days, with the threat of regulatory action if talks fail by June 11. Dr. Oz will help oversee these negotiations.
Pharma groups pushed back, warning that mimicking foreign prices could harm U.S. innovation and investment. Trump, however, signaled readiness to use broader leverage, including trade tariffs, to pressure foreign governments and drug companies.
Despite the bold rhetoric, experts suggest meaningful reform likely requires legislative action. Democrats, including Senator Pete Welch, emphasized the importance of codifying drug pricing reform through Congress. However, Republicans excluded Trump’s proposal from a broader health care plan they unveiled, which includes major Medicaid and ACA cuts and would reportedly leave millions uninsured.
Whether Trump’s approach will significantly lower drug prices — particularly for those with private insurance — remains uncertain. Broader reform ideas, such as limiting drug monopolies, capping out-of-pocket costs, and implementing centralized price negotiations, continue to be explored by health policy experts.
