Trump’s New Executive Order Targets Drug Prices

On May 12, 2025, former President Donald Trump signed a bold new executive order aimed at reducing prescription drug prices in the United States. Reviving a policy effort from his first term, the order is designed to realign U.S. drug prices with those paid in other developed countries, potentially saving billions in healthcare costs.

1. Most Favored Nation Pricing

At the heart of the executive order is the reinstatement of the Most Favored Nation (MFN) pricing model. Under this policy, government programs such as Medicare and Medicaid will no longer pay more for prescription drugs than the lowest prices available in comparable developed nations. This is a major move to correct the long-standing issue of American consumers paying significantly more for medication than their international counterparts.

2. Pharmaceutical Negotiation Period

The order gives drug manufacturers a 30-day window to voluntarily reduce prices. If they do not comply, the administration plans to enforce the pricing model through regulatory mechanisms within 180 days. This approach offers companies a short-term chance to self-correct before federal intervention.

3. Direct-to-Consumer Drug Sales

The executive order encourages pharmaceutical companies to sell medications directly to patients at MFN prices. This provision bypasses traditional middlemen like pharmacy benefit managers (PBMs), which are often criticized for driving up costs. The goal: streamline access and reduce markups for consumers.

4. Stronger Federal Enforcement

Trump’s directive also calls on agencies like the Department of Justice, the Federal Trade Commission, and the FDA to crack down on anti-competitive behavior in the pharmaceutical industry. Additionally, it promotes policies to increase the importation of more affordable drugs from overseas, provided safety standards are maintained.

5. Targeted Support for Essential Medications

Recognizing the critical nature of medications like insulin and epinephrine, the executive order includes targeted price relief for low-income and uninsured Americans. These life-saving treatments have been at the center of the national conversation on drug pricing.

🗣️ Public Reaction

The executive order has received a mix of praise and skepticism:

• Supporters, including Democratic Representative Ro Khanna and entrepreneur Mark Cuban, have applauded the order as a long-overdue reform to make medications more affordable.
• Critics, particularly within the pharmaceutical industry, warn that forced price reductions could deter innovation and limit future investment in drug research and development.

Legal challenges and logistical hurdles are also anticipated as the administration attempts to implement these sweeping reforms.

⚖️ A Reboot of a Prior Effort

Bottom Line:

If implemented successfully, President Trump’s executive order could mark one of the most aggressive federal interventions into drug pricing in modern history—potentially delivering substantial savings for American patients.

📌 For further details, view the official White House fact sheet.