President Donald Trump will revive a controversial policy on Monday which aims to reduce medication costs by linking the amount that the government pays for certain drugs to reduce prices abroad, said White House officials.
Trump will sign an executive decree including several different actions to renew this effort, known as the “most favored nation” policy. Trump did not refer to specific nations, but said that he would target other developed countries because “some countries need additional help, and that's good”.
“Basically, what we do is equalize,” Trump said at a press event on Monday. “We will pay the lowest price in the world. We will get the lowest price, this is the price we are going to get.”
But the managers of the White House have not disclosed the drugs to which the order will apply. They said that Monday's announcement will be wider than a similar policy that Trump tried to push during his first mandate, which applied only to Medicare Part B drugs.
Officials have added that the administration will focus on drugs that have “greatest disparities and largest expenses”, which could include popular weight loss and diabetes treatments called GLP-1 drugs.
We do not know how effective policy will be to reduce costs for patients. In an article on social networks on Monday, Trump said that drug prices will be reduced by “59%, more!”
But Trump at the press event said that drug prices could fall even more, between 59%and 80%, or “I even suppose 90%”.
The actions of American drug manufacturers were mixed on Monday. Actions of Cripple increased by more than 4%, while the shares of Pfizer And Amgen has climbed more than 2%
How will the pricing of Trump drugs work
President Donald Trump, joined by the Secretary of Health and Social Services, Robert F. Kennedy Jr., speaks during a press conference in the Roosevelt hall of the White House on May 12, 2025, in Washington, DC.
Andrew Harnik | Getty images
Part of the order aims at nations abroad, which have more power to negotiate the prices of drugs with pharmaceutical companies.
“From today, the United States will no longer subsidize health care of foreign countries, which we did,” said Trump, adding that the United States “will no longer tolerate profit and prices for Big Pharma”.
He added that “these are really the countries that forced Big Pharma to do things that, frankly, I'm not sure they were really feeling comfortable.”
The ordinance orders the office of the American commercial representative and the Ministry of Commerce to repress “unreasonable and discriminatory policies” in foreign countries which “suppress” the prices of drugs abroad, officials said.
“We are going to work to make sure that countries are not unfair in their negotiations with pharmaceutical companies, right?” A manager said. The manufacturers of drugs “complain constantly” to be put “in an untenable situation when they are in these negotiations” because these companies must generally negotiate discount on drugs with whole countries, added the manager.
Unlike the United States, several foreign countries offer universal health coverage where the government is the only payer, which gives it a significant lever effect to negotiate or fix the prices of drugs.
The White House officials said they expected that drug manufacturers grant discounts in all areas to “refer” the actions that the Trump administration takes to respond to prices abroad.
Trump's order also directs the secretary of the Ministry of Health and Social Services to encourage drug manufacturers to offer “the most favored prices of countries” on “direct sales to consumers” of their drugs.
“We are going to cut the intermediaries and facilitate direct selling of drugs at the price of the most preferred nation, directly to the American citizen,” said Trump.
Within 30 days, the secretary will also have to set clear objectives for price reductions in all markets in the United States, the officials said. This will open a series of negotiations between HHS and the pharmaceutical industry, said officials, providing no exact details on the nature of these talks.
If “adequate progress” is not made towards these price objectives, the secretary of HHS, Robert F. Kennedy Jr.
The ordinance also orders the Food and Drug Administration to consider extending imports from other developed countries beyond Canada. Trump signed a separate decree in April to direct the Food and Drug Administration to improve the process by which states can apply to the importation of Canada -based drugs, among other actions intended to reduce the prices of drugs.
Monday's order also orders the Ministry of Justice and the Federal Commerce Commission to aggressively apply “anti-competitive actions” which maintain high prices in the United States
The Ministry of Commerce will also examine export restrictions which “feed and allow this low price abroad”.
These are Trump's latest efforts to try to slow down the prices of American prescription drugs, which are two to three times higher on average than those of other developed countries – and up to 10 times more than in certain countries, according to the Rand Corporation, a group for thinking about public policies.
Order is a blow for the pharmaceutical industry, which is already preparing for Trump's planned prices on prescription drugs. The manufacturers of drugs argued that the policy of the “most favored nation” would harm their profits and, ultimately, their ability to seek and develop new drugs.
White House officials argued that pharmaceutical companies will continue to earn money after price reductions if they realize that the United States “only will not pay for innovation” and if they increase prices abroad to obtain additional income.
Drug manufacturers “should conclude agreements where they are financially rewarded the value they offer to other nations, health systems,” said a manager.
“Other countries should also pay for research and development. This is for their advantage,” added Trump on Monday.
Policy could help patients by reducing prescription medication costs, which is a problem in mind for many Americans. In the United States, more than three out of four adults claim that the cost of drugs is unaffordable, according to a KFF survey of 2022.
The industry also put pressure against similar Trump plans during its first mandate. He tried to advance politics in the last months of this quarter, but a federal judge interrupted the effort following a trial of the pharmaceutical industry. The Biden administration then canceled this policy.
Officials of the White House initially put pressure on the Republicans of the Congress to include a provision of “the most favored nation” in the draft law of major reconciliation which they plan to adopt in the coming months, but the policy would have specifically targeted the costs of drug drugs, Politico reported earlier this month. Several members of the GOP opposed this measure.
Effects on patients, companies
The largest commercial group in industry, Phrma, said that Trump's Medicaid proposal could cost drug manufacturers up to 1 dollars over a decade.
Some health policy experts have said that a “most favored” drug policy may not be effective in reducing medication costs.
For example, USC experts have declared that the policy “cannot cancel the basic economy of the global drug market”, where 70% of the pharmaceutical profits worldwide come from the United States
“Faced with a choice between the deep cuts in their American prices or the loss of markets abroad weakly profitable, we can expect that many companies withdraw from foreign markets in their first opportunity,” said experts in a report in April.
This will let the Americans pay the same amount for medication, drug manufacturers with lower profits and future patients of patients with less innovation, they said.
“In short, everyone is losing,” said experts.
Other experts have declared that another legal struggle with the pharmaceutical industry could prevent the policy from taking effect.
But even if the pharmaceutical industry dates back to the executive order of Trump, its administration always has another tool to lower the prices of medicines: negotiations for drugs for medication medication.
This is a key provision of the law on the reduction of inflation which gives Medicare the power to negotiate certain prices of prescription drugs with the manufacturers for the first time in history.
Trump last month proposed a change in this policy that drug manufacturers have long looked for. Legislators on both sides of the aisle could be receptive to the idea, which proposes to change the rules that make the difference between small molecule drugs and biological drugs.
Trump last week said he was planning to announce prices on imported drugs in the United States in the next two weeks. The samples planned aim to stimulate the manufacture of interior drugs.
Drug manufacturers, including Eli Lilly And Pfizerpostpone these potential tasks. Some companies have wondered if the prices are necessary, since several of them have already announced new American investments in manufacturing and research and development since Trump took office.
However, Trump last week doubled on the re -entertainment efforts of the manufacturing of drugs. He signed an executive decree which rationalizes the path of drug manufacturers to build new production sites.
Caplan noted that even if the pharmaceutical industry dates back to the executive order, the administration always has another tool at its disposal: negotiations on the prices of medication medication.