WASHINGTON — President Donald Trump on Monday signed an executive order that he pledged would significantly reduce the price of drugs in the U.S. and “bring fairness to America” in part by aiming to require other countries to pay more.

What You Need To Know

  • President Donald Trump on Monday signed an executive order that he pledged would significantly reduce the price of drugs in the U.S. and “bring fairness to America” in part by aiming to require other countries to pay more
  • The move toward a “most favored nations" policy marks the president’s second attempt to address the issue after a similar order in his first term was met with fierce opposition from the pharmaceutical industry and ultimately faced legal challenges before being rescinded by former President Joe Biden
  • At its basis, the policy aims to set the price of prescription drugs in America at the same level as the nation paying least for the same medication
  • Centers for Medicare & Medicaid Services Administrator Mehmet Oz told reporters that Trump’s top health officials would be approaching pharmaceutical companies over the next 30 days to negotiate new prices, and Trump said his administration would use the power of the federal government if talks don't progress 

The move toward a “most favored nations" policy marks the president’s second attempt to address the issue after a similar order in his first term was met with fierce opposition from the pharmaceutical industry and ultimately faced legal challenges before being rescinded by former President Joe Biden. 

Announcing the policy at a morning news conference at the White House alongside Health and Human Services Secretary Robert F. Kennedy Jr., Centers for Medicare & Medicaid Services Administrator Mehmet Oz and other top health officials in his administration, Trump asserted the move would bring down the cost of some medications in the U.S. by 50% to 90% “almost immediately," although such a feat remains to be seen. 

At its basis, the policy aims to set the price of prescription drugs in America at the same level as the nation paying least for the same medication.

“Whoever is paying the lowest price, that's the price that we're going to get,” Trump pledged. 

Oz told reporters that Trump’s top health officials would be approaching pharmaceutical companies over the next 30 days to negotiate new prices. 

“We're looking forward to a thoughtful interaction with these corporate leaders, many of whom we've spoken to and, in quiet, will agree the system is not right the way it is,” the CMS administrator said. 

The administration would pursue the change through the powers of the federal government, such as the rulemaking process, should talks over new prices not progress, Trump noted. 

“Big Pharma will either abide by this principle voluntarily or we will use the power of the federal government to ensure that we are paying the same price as other countries,” Trump said. 

He also noted he is directing his trade representatives and the Commerce Department to begin investigations into countries that “extort drug companies” by refusing to allow products unless they are priced low, which he argued”unfairly” shifts the cost burden to the U.S. For nations like those represented by the European Union, the president said he had a message that the “game is up.”

It is unclear what impact the administration can have on prices in other nations, but the president said he didn’t believe other countries would try to “get cute” with it, arguing they need the U.S. for trade. 

“If they want to get cute, then they don't have to sell cars into the United States anymore,” he said. 

Despite America making up only about 4% of the world’s population, pharmaceutical companies make more than two-thirds of their profits in the U.S., according to Trump. He said many cite research and development costs as the reason and said this move would be “equalizing” such a price that ultimately shouldn’t impact the companies much. 

“I really don't believe they're going to be — should be — affected very much because it's just a redistribution of wealth,” he said. “It's a redistribution where it’d be the same top line, but it's going to be distributed differently. Europe is going to have to pay a little bit more. The rest of the world is going to have to pay a little bit more, and America is going to pay a lot less.”

At the same time, Trump did say that he would be willing to “sacrifice” to help out some countries in “dire need.” 

Both parties have sought to sound the alarm on the price Americans pay for drugs, particularly compared to those in other countries. Biden often touted — including as recently as his last week in his first live TV interview post-presidency — his move to give Medicare the power to negotiate lower prescription drug costs for seniors. 

Trump also used the news conference to hint at what could be a revived effort to do away with the Affordable Care Act — the Obama-era sweeping health care overhaul that the president tried but fell short of repealing in his first term. Trump’s line on the campaign trail in 2024 in which he said he had the “concepts of a plan” to replace it received significant attention. 

“I think this gives the Republicans a chance to actually do a health care that's much better than Obamacare and for less money,” Trump said of his new move, asking his team to “work on that along with Congress.” 

The president also said he spoke with the Republican leaders in the House and Senate earlier and told them to account for the cost changes associated with the move as they go about crafting his legislative agenda. He said it could pay for his idea to build a “Golden Dome” around the U.S., modeling on Israel’s “Iron Dome.”