President Donald Trump signed a sweeping drug price executive order on Monday. The Trump drug price executive order requires pharmaceutical companies to lower prices to match what other developed countries pay.
Trump announced that the order could reduce drug prices by up to 59%. This followed earlier remarks suggesting cuts of 30% to 80% under a “most favored nation” pricing model. That approach ties U.S. drug prices to the lowest rates offered in comparable countries.
The White House said the administration will issue price targets within 30 days. If drugmakers fail to meet those targets within six months, the government will take additional steps to reduce costs.
The order caught pharmaceutical companies off guard. Industry lobbyists had expected a narrower measure focused only on Medicare drugs. Instead, the new order includes broader pricing reforms and instructs agencies to explore direct-to-consumer drug programs at globally competitive rates.
Trump’s plan builds on prior efforts during his first term. Those attempts faced legal setbacks, but the current administration is pursuing broader and more aggressive action.
The U.S. pays the highest prescription drug prices in the world, nearly three times more than other advanced economies. Trump said aligning domestic costs with international standards would help fix the imbalance.
Unlike past proposals, this order also empowers officials to work on mechanisms that allow consumers to buy medications directly at international prices.
The administration insists the order complies with legal standards. Officials said they would prioritize transparency and affordability while implementing enforcement measures if needed.
With the Trump drug price executive order now in effect, drugmakers face pressure to cut costs or face government action. The next six months will determine if the pharmaceutical industry responds or forces another policy showdown.
