Trump executive order aims to ‘equalize’ drug costs for the US

WASHINGTON - President Donald Trump said he’s signing an executive order on Monday morning that will reduce the cost of prescription drugs. 

He teased the announcement Sunday on his Truth Social account, saying it would be "one of the most important and impactful" executive orders he’s ever issued. 

Trump executive order on prescription drug costs

Big picture view:

Trump’s order takes a so-called "most favored nation" approach to Medicare drug pricing. 

According to the Associated Press, it sets a 30-day deadline for the health department to broker new price tags for drugs.

If a deal is not reached, a new rule will kick in that will tie the price of what the U.S. pays for medications to lower prices paid by other countries.

Dig deeper:

Prices in other countries are often lower because governments directly negotiate with manufacturers.

By the numbers:

The federal government spends hundreds of billions of dollars on prescription drugs, injectables, transfusions and other medications every year through Medicare, which covers nearly 70 million older Americans.

Trump said Sunday that the order would reduce prescription drug and pharmaceutical prices "almost immediately, by 30% - 80%."

FILE - U.S. President Donald Trump speaks during a swearing-in ceremony for new U.S. Ambassador to China David Perdue in the Oval Office at the White House on May 7, 2025, in Washington, DC. (Photo by Anna Moneymaker/Getty Images)

What they're saying:

Trump held a press conference Monday morning, alongside Robert F. Kennedy Jr., the Health and Human Services Secretary, and Mehmet Oz, the Administrator for the Centers for Medicare and Medicaid Services. 

Trump said the U.S. was done "subsidizing" healthcare costs for other countries, and said he’s "equalizing" costs across the globe. 

"Basically what we're doing is equalizing. There's a new word that I came up with, which I think is probably the best word - we're going to equalize - where we're all going to pay the same," he said. 

"The principle is simple: whatever the lowest price paid for a drug in other developed countries, that is the price that Americans will pay," he continued. "I’m using the term "other developed countries", because there are some countries that need some additional help, and that's fine," he added.

Kennedy said the pricing is a bipartisan concern that, he alleged, hasn’t been able to be addressed until now because pharmaceutical companies heavily lobby Congress. 

"Nobody wanted to do anything because it was radioactive," he said, but said Trump "can’t be bought."

The backstory:

The U.S. routinely outspends other nations on drug prices, compared with other large and wealthy countries, a problem that has long drawn the ire of both major political parties, but a lasting fix has never cleared Congress.

Trump has attempted before to pass such an act that would lower prices for some prescription drugs. 

He signed a similar executive order in the final weeks of his first presidency, but a court order later blocked the rule from going into effect under the Biden administration.

The other side:

The nation's leading pharmaceutical lobby on Sunday pushed back, calling it a "bad deal" for American patients. Drugmakers have long argued that any threats to their profits could impact the research they do to develop new drugs.