President Donald Trump on Monday signed a sweeping executive order giving drugmakers 30 days to lower the cost of prescription drugs in the United States or face strict new limits on what the federal government will pay for medications under Medicare and Medicaid.
The directive orders the Department of Health and Human Services, led by Robert F. Kennedy Jr., to negotiate new prices with pharmaceutical companies. If a deal is not reached within the 30-day window, a new pricing rule will automatically take effect — one that ties US drug prices to those paid by other countries, many of which pay far less.
“We’re going to equalize,” Trump said at a White House press conference. “We’re all going to pay the same. We’re going to pay what Europe pays.”
The measure is the latest revival of Trump’s controversial “most favored nation” approach, which he first attempted during his previous presidency. Under the new plan, if negotiations fail, Medicare and Medicaid would begin paying the lowest prices available in other developed nations for prescription drugs — a move Trump claims will save taxpayers “TRILLIONS OF DOLLARS.”
While the plan could significantly reshape federal drug spending, its immediate impact on the tens of millions of Americans with private health insurance remains unclear. The federal government has the most leverage over drug prices through its spending on Medicare, which covers nearly 70 million older Americans, and Medicaid, which serves around 80 million low-income and disabled individuals.
The pharmaceutical industry quickly pushed back against the order. Stephen J. Ubl, president and CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), warned that tying US drug prices to foreign benchmarks could reduce investment in innovation and increase reliance on foreign suppliers.
“Importing foreign prices will cut billions of dollars from Medicare with no guarantee that it helps patients or improves their access to medicines,” Ubl said in a statement. “It jeopardizes the hundreds of billions our member companies are planning to invest in America.”
The 2025 executive order echoes Trump’s 2020 effort to limit US drug costs, which faced legal challenges and was ultimately blocked under the Biden administration. At the time, drugmakers argued that the policy would allow foreign governments to determine the value of medicines in the United States.
On Monday, Trump stood firm in his criticism of pharmaceutical companies, accusing them of profiting disproportionately from American consumers while citing research and development as a cover for high prices.
“The pharmaceutical companies make most of their profits from America,” he said. “That’s not a good thing.”
Flanked by key administration officials including Kennedy, FDA Commissioner Dr. Marty Makary, Medicare chief Dr. Mehmet Oz, and NIH Director Jay Bhattacharya, Trump signaled a tough stance. He threatened investigations into industry practices and floated the idea of expanding drug imports from overseas to drive prices down.
Dr. Oz said the government would meet with pharmaceutical executives in the coming weeks to propose price revisions based on international benchmarks. Still, he acknowledged that the department’s ability to influence prices for those with private insurance is limited.
In 2022, Congress passed a law granting Medicare the authority to negotiate prices for a small number of drugs starting in 2026 — a provision fiercely opposed by drugmakers, who sued unsuccessfully to stop it.
Despite bipartisan frustration over America’s world-leading drug prices, comprehensive reform has long eluded Congress. Trump, who entered office vowing to end what he called “pharmaceutical robbery,” once again blasted industry lobbying and campaign contributions, insisting the time for reform has come.
“The American people have been suckers for far too long,” Trump wrote on social media Sunday. “We’re going to do the right thing.”
Erizia Rubyjeana
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