President Donald Trump announced on Sunday that he will sign an executive order aimed at significantly lowering the cost of prescription drugs in the United States. He claims this move could reduce prices by as much as 30% to 80% almost immediately.
In a post on Truth Social, Trump described the order as a step towards “FAIRNESS TO AMERICA.” He stated that the goal is to lower drug costs in the U.S. while increasing them in other countries. He plans to sign the executive order on Monday at 9:00 A.M. in the White House, calling it one of the most important actions in the country’s history.
The key feature of the order is a "MOST FAVORED NATION’S POLICY." This means that the U.S. will pay the same price for drugs as the country that pays the lowest price worldwide. Trump believes this will ensure fair treatment for American citizens and lead to unprecedented reductions in healthcare costs. He also mentioned that this policy could save the U.S. trillions of dollars.
This new plan follows Trump’s earlier announcement of potential major tariffs on pharmaceuticals. He explained that these tariffs would encourage pharmaceutical companies to bring their operations back to the U.S., as America represents a significant market.
Currently, drug prices in the U.S. are much higher than in other countries. A 2024 report from the Rand Corporation found that American prices are, on average, 2.78 times higher than those in 33 other nations. For brand-name drugs, the situation is even more pronounced, with U.S. prices averaging 4.22 times those in other countries.
Several factors contribute to the high cost of drugs in the United States. These include a lack of price transparency and the absence of centralized government negotiators, which are common in many foreign countries. This executive order aims to address these issues and bring down costs for American consumers.