Amanda Seitz and Seung Min Kim, Associated Press
WASHINGTON (AP) — President Donald Trump signed a massive executive order on Monday that would set a 30-day deadline for drug makers to cut costs for US prescription drugs or face new restrictions on what the government pays.
The order calls on the health department, led by Robert F. Kennedy Jr., to mediate a new price tag for the drug. If the transaction is not reached, a new rule will be kicked, linking the prices of those that the US pays drugs to lower the prices that other countries pay.
“We’ll be equal,” Trump said at a press conference Monday morning. “We all make the same payments. We’re going to pay what Europe pays.”
It is unclear if any, if any, that the Republican president’s executive order will affect millions of Americans with private health insurance. The federal government has the greatest power to shape the price that Medicare and Medicaid pay for drugs covered.
The federal government spends hundreds of millions of dollars each year on prescription drugs, injections, blood transfusions and other medications through Medicare. Meanwhile, Medicaid covers nearly 80 million poor people and disabled people in the US.
Prior to the signature, one of the nation’s leading drug lobbies on Sunday opposed Trump’s plans, calling it a “bad deal” for American patients. Drugmakers have long argued that threats to their own interests could affect research they undertake to develop new drugs.
“The import of foreign prices will cut billions of dollars from Medicare without ensuring it will help patients and improve access to medicines,” PhRMA president and CEO Stephen J. UBL said in a statement. “It puts the hundreds of billions of people that our member companies plan to invest in America at risk and rely more on China for innovative medicines.”
Trump’s so-called “most preferred country” approach to Medicare drug pricing is controversial as he tried to implement it first during his first term. He signed a similar executive order in the last week of his presidency. This has called for other countries to pay only lower prices than some drugs (infusions or cancer drugs given through infusion).
That narrow executive order faced hurdles with a court order that prevented rules from being enacted under President Joe Biden’s administration. The pharmaceutical industry has argued that Trump’s 2020 attempt will give foreign governments a “dominance” in determining the value of US drugs.
Trump repeatedly defended the drug company, instead denounced other countries in a broad speech at the White House on Monday, when Americans denounced other countries for paying for drugs. The president was adjacent to Kennedy, Dr. Mehmet Oz, the Center for Medicare and Medicaid Services Administrators, Dr. Marty McCurry, Director of Food and Drug Administration, and Jay Bhattacharya, Director of the National Health Bureau.
However, he conducted a federal investigation into their practices to introduce more imported drugs from other countries, threatening businesses opening US drug markets.
“Pharmaceutical companies make the majority of their profits from America,” Trump said. “That’s not a good thing.”
Trump made the announcement saying taxpayers would save a lot of money. In one post he boasted that his plans could save “trillions of dollars.”
“Our country will ultimately be treated fairly and citizens’ healthcare costs will be reduced by numbers they have never even thought about before,” Trump said in a separate post ahead of Monday’s announcement.
The White House did not release an analysis of how much money his order will save or which drugs will be affected.
Speaking Monday, Oz said he and other top leaders of the agency will meet with the drug company executives over the next 30 days to provide new prices on drugs based on what other countries pay.
The Department of Health has the most authority to change the price of drugs covered by Medicare and Medicaid, as it allows regulations to be set. Still, the power of the institutions to do so is limited. Congress approved a new law in 2022 that would allow Medicare to negotiate the prices it will pay for a small number of prescription drugs from 2026. Before the law, Medicare paid what the pharmaceutical companies had charged. Pharmaceutical companies have failed to implement the law.
Millions of Americans who are eligible for private drug insurance benefits are even more difficult for agents to operate.
The United States routinely outperforms other countries on drug prices compared to other large, wealthy countries. This has long drawn the rage of both major political parties, but the permanent amendment never cleared the parliament.
Trump took his first term in which he accused the drug company of “running away with murder” and complained that other countries where the government has set drug prices are using Americans.
On Sunday, Trump once again targeted the industry, writing, “For years, it’s the cost of research and development, and all of these costs will be borne by American “suckers” for no reason.”
Referring to the strong lobbying of the pharmaceutical company, he said the campaign’s contributions “can be surprised not with the Republicans, but with me.”
“We’re going to do the right thing,” he wrote.
Welissert, a writer at the Associated Press, contributed to this report.
Original issue: May 12, 2025 8:06am EDT
