In a fresh push to lower prescription drug costs in the US, President Donald Trump announced he would sign an executive order to match American prices with those paid by other wealthy countries.
Trump made the announcement on Sunday through a post on his social media platform, Truth Social, stating that he would move forward with the executive action on Monday morning.
The policy, which Trump described as a “Most Favoured Nation’s Policy,” would aim to bring the cost of prescription drugs in the US in line with the lowest prices available globally, reported Reuters.
“I will be instituting a MOST FAVOURED 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 wrote. Trump estimated the cost difference between the US and other developed nations to range between 30 per cent and 80 per cent.
Targeting International Reference Pricing
The initiative centers around a concept known as international reference pricing, where a country uses the price paid by other nations as a benchmark to set or negotiate its own drug prices. Trump suggested that this approach would not only bring fairness to American consumers but would also create upward pressure on drug costs elsewhere. “They will rise throughout the World in order to equalise and, for the first time in many years, bring FAIRNESS TO AMERICA!” he added.
US patients typically face the highest drug costs globally, often paying nearly three times as much as citizens in other developed countries. Trump has long criticised this pricing imbalance and previously attempted to introduce a similar policy during his first term, although that plan was blocked by a court. At the time, his administration projected the strategy would save taxpayers over $85 billion across seven years, in a market where annual prescription spending exceeds $400 billion.
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Industry Pushback and Policy Expectations
The pharmaceutical sector has been anticipating new executive action, especially measures targeting Medicare. According to four drug industry lobbyists briefed by the White House, the order is likely to impact a broader range of medications beyond those currently subject to negotiations under the Inflation Reduction Act passed during former President Joe Biden’s tenure.
As it stands, Medicare has finalized negotiated prices for 10 medications, which are scheduled to take effect next year. Additional drugs are expected to enter the negotiation process later in 2025. Trump’s proposed policy could significantly expand federal control over drug pricing, intensifying the ongoing debate between cost containment and market-driven pricing.
However, not all stakeholders are on board. Industry leaders have expressed concern over what they view as government overreach. “Government price setting in any form is bad for American patients,” said Alex Schriver, spokesperson for the Pharmaceutical Research and Manufacturers of America, when asked about the new executive order.
This potential shift marks another chapter in Trump’s ongoing effort to reshape the nation’s approach to prescription drug pricing—a politically charged issue with major implications for patients, pharmaceutical companies, and public health spending alike.
