Trump Slashes Drug Prices Up to 90% with Latest Executive Order
- Abigail Glezer
- 4 minutes ago
- 5 min read
WASHINGTON, D.C. - In a bold move aimed at overhauling prescription drug costs, President Trump has issued an executive order (EO) targeted at slashing prescription drug prices by up to 90%. The impetus behind this directive lies in the stark reality that U.S. drug prices can soar to 2.78 times higher than those in other developed nations. Trump’s ambitious plan would address this by linking what the U.S. government pays for drugs to the “most favored nation” (MFN) rates of other countries, targeting drug affordability as a result. However, this plan is expected to face significant resistance from pharmaceutical industry lobbyists and potential legal challenges, which could impact its ultimate success.
Executive Order: EO 14297, Signed: May 12, 2025
Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients
[Adapted from Section 1 - EO 14297] "The United States has less than five percent of the world's population and yet funds around three-quarters of global pharmaceutical profits. This egregious imbalance is orchestrated through a purposeful scheme in which drug manufacturers deeply discount their products to access foreign markets, and subsidize that decrease through enormously high prices in the United States.
The United States has for too long turned its back on Americans, who unwittingly sponsor both drug manufacturers and other countries. These entities today rely on price markups on American consumers, generous public subsidies for research and development primarily through the National Institutes of Health, and robust public financing of prescription drug consumption through Federal and State healthcare programs. Drug manufacturers, rather than seeking to equalize evident price discrimination, agree to other countries' demands for low prices, and simultaneously fight against the ability for public and private payers in the United States to negotiate the best prices for patients. The inflated prices in the United States fuel global innovation while foreign health systems get a free ride."
Big Pharma’s Concerns
The EO immediately ignited a firestorm of opposition from the Pharmaceutical Research and Manufacturers of America (PhRMA), the preeminent lobbying force representing leading U.S. pharmaceutical and biotechnology companies, wielding significant influence in drug pricing debates.
According to PhRMA's CEO Stephen J. Ubl, “Importing foreign prices from socialist countries would be a bad deal for American patients and workers. It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America – threatening jobs, hurting our economy, and making us more reliant on China for innovative medicines”.
They argue that drastically reducing revenue through price controls will force companies to cut back on research and development, ultimately harming patients by slowing down the discovery of new and better treatments. The potential for substantial loss of revenue provides further reason for the industry's resistance.
Familiar Legal Battleground
The MFN approach to drug pricing isn’t new, and Trump himself attempted to implement a similar policy during his first term.
In the final weeks of his presidency, he signed an executive order intended to link Medicare drug prices to those paid by other developed nations. However, this effort was short-lived. The courts blocked the order after the pharmaceutical industry successfully argued that Trump’s approach would allow foreign governments to influence the value of medicine in the U.S. and that the administration had not followed proper rulemaking procedures.
This history sets a precedent for legal challenges that could also undermine the current executive order.
Immediate Price Drops Unlikely
Despite the promises of big price cuts, health policy experts don’t expect patients to see significant savings right away. The initial phase involves voluntary negotiations, and any regulatory changes would likely take a considerable amount of time to implement, meaning real price relief for consumers could still be a ways off.
Rachel Sachs, a health law expert at Washington University, notes, "It does seem the plan is to ask manufacturers to voluntarily lower their prices to some point, which is not known...If they do not lower their prices to the desired point, HHS shall take other actions with a very long timeline, some of which could potentially, years in the future, lower drug prices."
Future of Drug Pricing
Ultimately, this executive order is a high-stakes move by the Trump administration with potentially major consequences for the pharmaceutical industry, the healthcare system, and American patients. The next few months will be crucial in determining whether this initiative can overcome the expected legal and industry opposition, as well as seeing how financial markets react to the potential pricing overhaul.
Looking beyond the immediate horizon, the long-term vision for American healthcare under this administration will begin to solidify. And the resilience and adaptability of the US healthcare ecosystem, its capacity to absorb these changes while continuing to advance patient care and scientific discovery, will be the ultimate measure of this transformative period.
Healthcare Insights will continue to provide in-depth coverage and expert insights as this new era unfolds, ensuring our readers remain at the forefront of understanding the evolving landscape.
Read more about the impact of federal research funding cuts on the future of medicine and learn about the most anticipated drug launches of 2025.
Further Reading:
If you liked this article:
Share this article with your network on LinkedIn with your thoughts or perspectives. Make sure to tag us @HealthcareInsights to join the conversation.
Subscribe to our free newsletter, HealthcareIn Quicktakes. You'll never miss an article, and will get access to exclusive reports.
Check out our library of articles and reports on biotech, healthcare, policy, and business.
Who We Are: At Healthcare Insights, we're covering the transformation of healthcare and bringing our readers the most pertinent takes on key issues in medicine, biotech, healthcare policy, and business. Our Spotlight Series ✦ features thoughts from the most influential figures in healthcare, including Nobel Prize-winning scientists shaping tomorrow's treatments and business leaders bringing new therapies to market. We strive to publish coverage that is authentic, impartial, and independent of any financial or political motive. For more information regarding our editorial standards, read our statement. If you'd like to contact the Editor, use this form to get in touch.
If you'd like to stay in the loop, make sure to subscribe to our free newsletter, HealthcareIn Quicktakes, and follow us @healthcareinsights across our social channels, including LinkedIn.
©️ Copyright 2025 Healthcare Insights
All Rights Reserved
Legal Disclaimer:
The information provided in this article has been collected from various academic publications, industry reports/analyses, regulatory guidelines, media coverage, and legal analyses. The information provided is for general information purposes only and should not be construed for medical, legal, financial, or professional advice. Readers are advised to seek independent professional guidance where relevant. While we strive to ensure the accuracy and timeliness of our coverage, we claim no liability, representations, or warranties of any kind about the completeness, suitability, accuracy, reliability, authorship, or availability of this article and all pertaining data within this article. Neither the author nor the publication will assume liability for any loss or damage arising from the use of the information provided in the article. The information within this article may be outdated or inaccurate over time, and neither the author nor the publication are obligated to update or revise such information. We reserve the right to modify, remove, or substantially edit the article, including the disclaimer, at any time.
