Trump Executive Order: U.S. Prescription Drug Prices Must Be No Higher Than Other Countries

WASHINGTON,  D.C – President Donald J. Trump signed an executive order today aimed at ensuring American patients pay prescription drug prices no higher than those offered to other developed nations.

Titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” the order addresses what the administration describes as an imbalance in global drug pricing, where U.S. consumers face significantly higher costs for the same medications.

The order states that the U.S., with less than 5% of the world’s population, funds approximately 75% of global pharmaceutical profits. It claims drug manufacturers offer discounts to foreign markets while charging higher prices in the U.S., resulting in Americans paying nearly three times more for identical drugs. The administration seeks to secure the lowest prices for Americans, as the largest purchaser of pharmaceuticals.

Key Provisions of the Executive Order

The order outlines several steps to achieve most-favored-nation pricing:

1. Addressing Foreign Pricing Practices: The Secretary of Commerce and the U.S. Trade Representative are directed to take action against foreign policies that suppress drug prices below fair market value, which the order says forces American patients to bear a disproportionate share of global research and development costs.
2. Direct-to-Consumer Sales: The Secretary of Health and Human Services (HHS) will facilitate programs allowing pharmaceutical manufacturers to sell directly to American patients at the most-favored-nation price, consistent with existing laws.
3. Setting Price Targets: Within 30 days, HHS, in coordination with other agencies, will communicate most-favored-nation price targets to drug manufacturers to align U.S. prices with those in comparable developed nations.
4. Contingency Measures: If manufacturers do not comply, the administration may:
   • Propose rulemaking to enforce most-favored-nation pricing.
   • Certify the safety of importing low-cost drugs from developed nations under the Federal Food, Drug, and Cosmetic Act.
   • Pursue enforcement against anti-competitive practices by drug companies, referencing sections of the Sherman Antitrust Act and the Federal Trade Commission Act.
   • Review exports of pharmaceutical drugs or materials contributing to global price disparities.
   • Reassess approvals for drugs deemed unsafe, ineffective, or improperly marketed.

The order emphasizes that Americans should not subsidize lower drug prices in other developed nations. It criticizes drug manufacturers for resisting price negotiations in the U.S. while agreeing to lower prices abroad, relying on U.S. consumers, public research subsidies, and federal healthcare programs to fund global innovation.