Donald Trump signs EO to drug pricing
President Donald Trump has signed an executive order on drug pricing to match prices in other countries.
Americans take more prescription drugs than people in Europe and other wealthy countries. Is that likely to change anytime soon?
President Donald Trump aimed at that price gap in his executive order on May 12th. It aims to lower drug prices for US consumers and taxpayers, and shares its reduction on social media at “59%, plus!” He then added to the White House, “I think it’s 90%.”
But some people doubt how much cut consumers will feel. Pharmaceutical experts say the executive order will not immediately affect how much people pay for pharmacies or mail-order prescriptions. The president urged the pharmaceutical industry to be subject to a barrage of regulatory measures to voluntarily lower drug prices for US consumers or to enforce lower prices.
“The president thinks about differences in pharmaceutical prices between countries just as he considers trade imbalances with other countries,” said John Burkett, managing director of management consulting firm BRG and former senior policy advisor at the Biden White House. “If we pay more than other countries, I think he’s cheating on us.”
How do orders drop?
The US Trade Representative and the Commerce Department have 30 days to give drugmakers a price target “to bring American patients prices along comparable developed countries,” the order said.
Without making significant progress towards these goals within six months, drugmakers could face action from several federal agencies. The requested drug discount can range from 59% to 80% from the list price.
Trump said other wealthy countries should pay more for prescription drugs. He called for an executive order. This aims to make Americans less billing, while other countries seek to charge more “equalization.”
For drugmakers who do not cut prices, the order directs Robert F. Kennedy Jr.’s Department of Health and Human Services to collect federal rules to impose prices alongside other developed countries.
Trump’s enforcement tools come from federal regulators. Pharmaceutical companies that do not meet price targets can “potentially change or revoke” approvals for drugs that have been found to be “insafe, ineffective, or inappropriately sold” in the face of a Food and Drug Administration review.
The order also resurfaced ideas from the Trump administration’s first term, achieving little intake – importing cheaper medicines from other countries.
Michael Cannon, director of health policy research at Cato Institute, said the threat of regulatory measures from several federal agencies would be “throwing spaghetti on the wall.”
“If they throw everything (at the pharmaceutical company), they’re likely to make the pharmaceutical company do what they want,” Cannon said.
How do these actions affect what I pay at the pharmacy counter?
The executive order “does not immediately affect American consumers,” Burkett said.
The amount paid by prescription drug consumers will vary depending on the health insurance plan that charges the proportion of the out-of-pocket or pharmacy bill. Prices often include complex rebates hidden from public views.
Research shows that consumers are feeling a pinch for higher drug prices. A 2023 survey by the Commonwealth Fund, a private foundation focusing on access to healthcare, nearly two in five said they either skipped or delayed or didn’t fill in prescriptions that year.
Some Democrats are skeptical that the executive order will provide meaningful drug price relief to consumers or taxpayers.
US Rep. Lloyd Dogget of D-Texas said Trump has “nothing can be achieved” about the drug price cut.
“As opposed to changing the law, Trump issuing another press release that offers little or none to consumers,” Dogget said. “Bying taxpayers and consumers to show mercy will do nothing to ensure access to affordable medicines.”
How much do our residents pay for prescription medication?
Americans pay more for these life-saving drugs than inhabitants of other wealthy countries.
According to a 2023 HHS report, prescription drug prices in the US are more than 2.5 times the same 32 comparable countries. The US spent $1,310 per person on prescription drugs, compared to $646 per person paid in other developed countries, the report said.
In January 2025, the AARP Public Policy Institute looked at the average prices of 25 drugs that Medicare spent the most but still hadn’t negotiated the lowest prices. The report found that prices have almost doubled as they are on the market, and in 2022 Medicare and taxpayers were spending nearly $500 billion.
About 7 million seniors at Medicare used drugs and had to pay part of the bill through pharmacies or mail orders.
How does Trump’s order compare to the Biden administration’s efforts to lower drug prices?
Under Biden’s 2022 Climate and Health Act, Medicare, the inflation reduction act, was empowered to negotiate prices with pharmaceutical companies on a limited number of drugs.
The law called for broad rules, public comments and discussions with pharmaceutical companies before Medicare could implement the discount.
The Biden administration has reduced the prices of 10 widely prescribed drugs, including the thin blood elixus that will be effective in 2026. In January, Medicare announced an additional batch of 15 drugs, subject to negotiations for discounts from 2027.
The law also called for penalties on pharmaceutical companies that raised the prices of prescription drugs faster than inflation.
What does the pharmaceutical industry think about Trump’s order?
Trade Group’s Drug Research and American manufacturers, or Stephen UBL, president and CEO of PhRMA, agreed to Trump’s assessment that foreign countries are not paying fair distributions.
UBL also said it would require scrutiny from the welfare manager at the pharmacy, which negotiates drug prices on behalf of the insurance company and patients.
“The administration is entitled to use trade negotiations to make foreign governments pay fair shares in medicine,” UBL said. “US patients should not create bills for global innovation.”
However, UBL said benefits managers, insurance companies and hospitals in the US are taking half of the dollar spent on drugs.
“The amount of money going to the intermediary is often more than the price in Europe,” UBL said. “Giving this money directly to patients will reduce the cost of the drug and significantly reduce the gap with European prices.”