In a sweeping move that could dramatically reshape the U.S. pharmaceutical landscape, President Donald Trump signed an executive order Monday aimed at slashing drug prices, declaring an end to what he called America’s decades-long role as the world’s medical piggy bank. Flanked by prominent healthcare officials, including Health and Human Services Secretary Robert F. Kennedy, CMS Administrator Dr. Mehmet Oz, and NIH Director Dr. Jay Bhattacharya, Trump made it clear: the era of Big Pharma dictating U.S. prices is over.
At the heart of the executive order is a “Most Favored Nation” (MFN) pricing policy, a radical restructuring that requires drugmakers to sell to Americans at the lowest price they offer to any other developed nation. In effect, it turns the global pricing model on its head.
“We were subsidizing others’ health care,” Trump said. “Countries where they paid a small fraction for the same drug. We’ll no longer tolerate profiteering and price gouging from Big Pharma.”
This MFN framework doesn’t just request price reductions—it includes enforcement mechanisms. If pharmaceutical companies fail to comply, Kennedy is empowered to impose price rules and deploy aggressive regulatory actions, potentially including direct importation, expanded competition, and penalties for anticompetitive behavior.
BREAKING: @POTUS just signed an executive order implementing Most Favored Nation prescription drug pricing — which will deliver dramatically lower drug prices for the American people.
Here’s what it does:
REDUCING DRUG PRICES FOR AMERICANS AND TAXPAYERS: Today, President Donald… pic.twitter.com/wjT4A5XofI
— Rapid Response 47 (@RapidResponse47) May 12, 2025
The order also instructs Commerce Secretary Howard Lutnick and U.S. Trade Representative Jameson Greer to investigate and act against countries engaging in pricing practices that undermine U.S. drug affordability. These foreign systems, Trump said, “forced” drug companies to hike prices in America to compensate for artificially low prices abroad—a cost-shifting tactic that left U.S. consumers footing the bill.
.@POTUS: “For the first time in many years, we’ll slash the cost of prescription drugs, and we will bring fairness to America.” pic.twitter.com/nchV2Sh0Lu
— Rapid Response 47 (@RapidResponse47) May 12, 2025
The fact sheet notes an additional innovation: Americans may soon be able to purchase drugs directly from producers at international benchmark prices, a seismic shift from the current model dominated by insurers, pharmacy benefit managers (PBMs), and middlemen.
While details are still emerging, such a mechanism would cut through layers of bureaucracy and profit-taking, offering consumers a more transparent and affordable pathway to prescriptions—one that critics of the pharmaceutical industry have long demanded.
Trump didn’t hold back in estimating the impact.
“Prices would come down between 59 and 80, and I guess even 90 percent,” he predicted.
It’s an ambitious projection, but one grounded in the stark global pricing disparities that have long defined U.S. healthcare: although Americans make up just 4% of the world’s population, Big Pharma derives more than two-thirds of its profits from U.S. markets.
With 2025 shaping up as a battle over the future of healthcare and populism, this move has far-reaching implications:
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Economically, it puts immediate pressure on pharmaceutical companies to adjust pricing strategies, not just in the U.S., but globally.
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Politically, it aligns Trump with bipartisan populist sentiment, and even drew praise from ideological opposites like Sen. Bernie Sanders, who echoed the call for pricing parity with developed nations.
This also sets the stage for a confrontation with powerful industry lobbies. Drugmakers are almost certain to challenge the executive order in court, arguing that it violates pricing autonomy, patent rights, and international trade norms.
