Trump signs executive order to cut drug prices by up to 90%

Over the weekend, President Donald Trump announced that he would be imminently signing a new executive order to cut prescription drug prices in the USA, to match those of other high-income countries. 

The order comes just one week after the executive order signed on the 5th May to reduce regulatory barriers for domestic US pharmaceutical manufacturing. 

Trump suggested that the cuts could lead to up to an 80% reduction in prices, and in a press conference further confirmed he expected cuts to be between 59% and 90%. Trump posted the announcement on social media platform Truth Social, indicating that the cuts were as part of a plan to enact ‘most favoured nation policy’ with regard to pricing, where the US will match the lowest price of anywhere in the world as a reference point.

Prescription drugs in the USA are the most expensive in the world, some even costing triple the price of the drugs in other, similarly developed countries. President Trump has expressed a desire to close this gap, and supposedly provide more equal access to healthcare compared to other nations. 

"They will rise throughout the World in order to equalise and, for the first time in many years, bring FAIRNESS TO AMERICA!" Trump stated on Truth Social.

"I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World," he added.

The executive order outlines price targets for the drugmakers in the coming 30 days, monitoring progress and enacting further guidelines if companies aren’t seen to be complying. In the press conference held on Monday, the President proclaimed that he would implement tariffs if the drug prices in the USA did not equalise those in other countries. 

This isn’t the first time Trump has tried to cut drug prices to calibrate them against other nations, the action was attempted in his first term initially, but at the time was rejected by the US courts.  

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That proposal was projected by Trump’s administration to save taxpayers more than US$85 billion over seven years, cutting into the US annual spending of more than US$400 billion on drugs. It’s unclear what the projected cost saving according to the Trump administration is this time around. 

The new order comes as part of a wider plan, building out from the Inflation Reduction Act, to tackle rising costs of everyday necessities for American citizens. 

The order aims to achieve the price cuts by enabling direct-to-consumer purchasing programmes through the government, and also recommends that the US Federal Trade Commission considers a strict enforcement against what they deem ‘anti-competitive’ practices by drugmakers. 

Health Policy Lawyer Paul Kim commented: "The order's suggestion of broader or direct-to-consumer importation stretches well beyond what the statute allows."

Part of how the government is hoping to enable these price cuts is by encouraging more imports from other developed nations, and applying restriction to exports from the USA. Which could be in direct conflict with the recently implemented import tariffs, and undercut the moves that many big pharmaceutical companies have been making to reshore manufacturing facilities to within the US. 

"Importing foreign prices from socialist countries would be a bad deal for American patients and workers. It would mean less treatments and cures and would jeopardise the hundreds of billions our member companies are planning to invest in America," Stephen Ubl, CEO of industry trade group PhRMA, said in a statement.

The full impact of the executive order is yet to be seen, as perspectives from different players in the industry are gathered over the coming weeks, but litigation from drug companies and other parties is likely to follow. 

Sources: 

Reuters. Trump to sign executive order to cut prices of medicine to match other countries. [Date Accessed 12/05/2025] www.reuters.com/business/healthcare-pharmaceuticals/trump-sign-executive-order-reducing-prescription-drug-prices-2025-05-11/

Reuters. Trump executive order demands pharma industry price cuts. [Date Accessed 13/05/2025] www.reuters.com/business/healthcare-pharmaceuticals/trump-says-he-will-cut-drug-prices-by-59-2025-05-12/