Trump's Executive Order Targets Drug Prices, Challenges Big Pharma

On May 12, President Donald Trump signed an executive order aimed at significantly lowering prescription drug prices in the United States. The order, titled "Providing Most-Favored-Nation Prices for Prescription Drugs to American Patients," introduces a series of strategies to ensure that U.S. citizens pay prices similar to those available in other developed nations.

According to the order, although the United States accounts for less than five percent of the global population, it has been funding approximately three-quarters of the pharmaceutical industry's worldwide profits. Trump described this as a "blatant imbalance," and declared his administration's intent to end this system.

"This is the most powerful executive order on pharmacy and healthcare pricing ever issued in the history of our nation," stated Dr. Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services. He was joined by Trump and Robert F. Kennedy Jr., Secretary of Health and Human Services, in the Roosevelt Room at the White House for the signing ceremony.

The order highlights that inflated drug prices in the U.S. have been subsidizing global innovation, while foreign healthcare systems benefit from lower prices. Just hours before signing the order, Trump asserted on his social media platform, Truth Social, that his administration would cut medication prices by "59%," in addition to reducing costs for gasoline, energy, food, and "everything else."

In his typical style, the president concluded his message with a personal touch, stating, "No inflation! With love, DJT."

Trump further criticized the longstanding practice of Americans being forced to cover the global pharmaceutical costs, often paying up to ten times more than other countries. "For years, we were told it was due to research and development costs, but in the end, America's 'fools' paid for everything. That ends now," he wrote.

The executive order outlines several key provisions to ensure American consumers benefit from lower prices:

Key Measures of the Executive Order

Most-Favored-Nation Policy: Americans should have access to the same low prices offered in other developed countries. If pharmaceutical companies do not voluntarily comply, the government will take further steps to enforce compliance.

Actions Against Foreign Countries: The Secretary of Commerce and the U.S. Trade Representative are tasked with preventing foreign countries from enjoying U.S.-funded pharmaceutical advances without paying fair prices.

Direct-to-Consumer Sales: The Secretary of Health and Human Services will facilitate programs allowing drug manufacturers to sell directly to American consumers at the lowest price.

Establishment of Regulated Prices: Within 30 days, authorities must inform pharmaceutical companies of most-favored-nation price targets. If significant progress isn't made, a regulation imposing these prices will be proposed.

Compliance Measures: In cases of anti-competitive practices, the Attorney General and the Federal Trade Commission may pursue legal action.

Importation of Medications: The order considers allowing the importation of low-cost drugs from other countries, provided safety and quality are assured.

This executive directive poses a significant challenge to large pharmaceutical companies, which rely heavily on revenue from the U.S. market to sustain their profit margins. CNN pointed out that "it's unclear whether Americans will see lower prices and what authority the U.S. government has to direct drug prices in other countries."