White House EO Make It More Affordable To Buy Drugs
On May 12, 2025, President Donald Trump signed an executive order aimed at forcing drug companies to lower prescription drug prices in America by implementing a “most favored nation” (MFN) pricing policy. This policy mandates that the U.S. pay the same price for drugs as the nation that pays the lowest price globally, a move Trump claims will reduce prices by 30% to 80%. The order, signed at 9 a.m. EDT, targets the long-standing issue of Americans paying significantly more—often three times as much as other developed nations—for the same medications. By setting price targets for drugmakers and threatening tariffs or further regulatory action if they fail to comply within six months, the administration seeks to end what Trump calls the “free-riding” of foreign nations on American consumers, potentially saving taxpayers billions while making drugs more affordable for patients.
The executive order builds on Trump’s prior efforts to address drug pricing, expanding its scope to include both Medicare and Medicaid, and introduces mechanisms to bypass middlemen by allowing patients to buy directly from manufacturers at MFN prices. It also encourages increased importation of lower-cost drugs from other developed nations and directs the Federal Trade Commission to crack down on anti-competitive practices by drugmakers that keep prices inflated. While the U.S. funds roughly 75% of global pharmaceutical profits despite comprising less than 5% of the world’s population, this order aims to shift the burden back to drug companies, compelling them to offer prices comparable to those in countries like Sweden or Japan—where, for instance, a drug like Eliquis costs $114 and $20 respectively, compared to $295 in the U.S. under Medicare’s negotiated rate. If enforced, this could drastically reduce out-of-pocket costs for Americans, particularly seniors and low-income patients reliant on these programs.
However, the order’s success in achieving reasonable and economical drug prices faces significant hurdles, raising doubts about its immediate impact. The pharmaceutical industry, represented by groups like PhRMA, has already pushed back, arguing that such “government price setting” could stifle innovation and fail to improve patient access, echoing objections that led to a federal court blocking a similar MFN policy during Trump’s first term. Legal and logistical challenges remain, as the order lacks congressional backing to enforce list price reductions across private insurers and pharmacies, and its reliance on executive action makes it vulnerable to lawsuits. Moreover, while the policy may pressure drugmakers to lower U.S. prices, it could also lead to higher prices globally as companies adjust to maintain profits, potentially undermining the “fairness” Trump touts. Despite these concerns, the order signals a bold attempt to address a bipartisan issue, though its real-world effect on drug affordability will depend on implementation and the administration’s ability to navigate the complex pharmaceutical landscape.
