Executive Order Targets Prescription Costs: Unseen Impacts on Healthcare Structure

President Trump signs a “Most Favored Nation” executive order that could slash prescription drug prices by up to 80%, challenging Big Pharma’s pricing practices that have long burdened American consumers.

Quick Takes

Trump’s executive order would force Medicare to pay the same price for drugs as the lowest-paying developed nation globally.
The policy primarily targets expensive medications administered in doctors’ offices, such as cancer treatments and injectable drugs.
Americans fund approximately 75% of global pharmaceutical profits despite making up less than 5% of the world’s population.
HHS Secretary Robert F. Kennedy Jr. will establish mechanisms for Americans to purchase drugs directly from manufacturers at “Most-Favored-Nation” prices.
The pharmaceutical industry opposes the measure, arguing it could harm innovation and profits.

Trump Takes Aim at Prescription Drug Pricing

President Donald Trump has signed an executive order titled “DELIVERING MOST-FAVORED-NATION PRESCRIPTION DRUG PRICING TO AMERICAN PATIENTS,” designed to dramatically reduce prescription drug costs for Americans. The measure aims to ensure the United States no longer pays significantly higher prices for medications than other developed nations by implementing international pricing benchmarks. This policy would require Medicare to match the lowest prices paid by other countries globally, potentially reducing costs for certain medications by 50-90% according to administration estimates.

The executive order specifically targets medications administered in doctors’ offices under Medicare Part B, including expensive cancer treatments and injectable drugs. Medicare spent over $33 billion on Part B drugs in 2021 alone, with Americans consistently paying substantially more than patients in other countries for the same medications. The policy represents a renewed attempt by Trump, who tried implementing similar measures during his first administration before facing legal challenges that ultimately blocked implementation.

Americans pay three times more for prescription drugs than patients in other wealthy countries. That ends now.

Today, President Trump signed an Executive Order to demand Most-Favored-Nation pricing — no more gouging Americans to subsidize foreign governments.

I stand with… pic.twitter.com/FuZQcDG6cR

— Secretary Kennedy (@SecKennedy) May 12, 2025

Ending America’s Subsidy of Global Pharmaceuticals

During the signing ceremony, Trump and Health and Human Services Secretary Robert F. Kennedy Jr. both criticized the current pharmaceutical pricing system. They highlighted the disparity where Americans fund approximately three-quarters of global pharmaceutical profits despite representing less than 5% of the world’s population. Under the new order, the U.S. will effectively end what the administration describes as subsidizing foreign healthcare systems by refusing to continue paying inflated domestic prices.

The order directs the Secretary of Health and Human Services to establish mechanisms allowing Americans to purchase medications directly from manufacturers at the “Most-Favored-Nation” price. If pharmaceutical companies don’t comply, the Secretary is authorized to propose rules and take measures to reduce drug costs and end anticompetitive practices. The White House has indicated it’s preparing to address potential workarounds pharmaceutical companies might attempt to maintain their profit margins.

Industry Opposition and Implementation Challenges

The pharmaceutical industry has already signaled strong opposition to the measure, arguing it could harm profits and innovation in drug development. Previous attempts to implement similar policies faced substantial industry pushback and legal challenges. The Biden administration abandoned Trump’s earlier version of this proposal in 2022, citing court orders and stakeholder concerns. Critics within the pharmaceutical sector warn that reduced profits could lead to fewer new medications being developed in the future.

It’s important to note that the policy primarily affects Medicare Part B drugs and would not immediately impact common prescription medications filled at retail pharmacies. However, the administration suggests this represents just the first step in broader pricing reforms. During the signing ceremony, RFK Jr. praised Trump for his willingness to challenge pharmaceutical companies and stand up for American consumers, suggesting the partnership between the former political rivals could yield additional healthcare policy changes in the coming months.