On May 12, 2025, President Trump signed an executive order to reduce U.S. prescription drug prices by aligning them with the lowest rates in comparable developed countries. The policy, part of a broader healthcare cost reduction effort, introduces a “Most-Favored-Nation” pricing model and a direct-to-consumer purchasing system to bypass intermediaries like pharmacy benefit managers.
Policy Details
The Department of Health and Human Services will implement the pricing model, ensuring drugmakers match or undercut foreign prices. The order also tasks federal agencies with examining foreign price suppression policies that may inflate U.S. costs. Additional measures promote generic and biosimilar drugs and offer discounts for low-income patients, expanding on prior transparency initiatives.
Industry and Consumer Perspectives
The White House cites data showing U.S. consumers pay triple the price for brand-name drugs compared to other OECD nations. Supporters argue the policy will provide relief, but the Pharmaceutical Research and Manufacturers of America warns it could reduce innovation, shift manufacturing abroad, and limit access to new therapies due to lower investment.
Broader Implications
The order’s success hinges on enforcement and industry responses. It could lower costs for millions but may face legal or logistical challenges. Ongoing debates will shape healthcare policy, balancing affordability with the need for pharmaceutical advancements, as stakeholders monitor implementation outcomes.
