Trump Orders 30-Day Deadline for Drugmakers to Lower U.S. Prescription Prices

President Donald Trump signed an executive order imposing a 30-day deadline for pharmaceutical companies to voluntarily lower prescription drug prices in the U.S. If no agreement is reached, the Health Department will consider implementing policies to tie U.S. drug prices to lower prices seen in other countries. The policy primarily targets drugs covered by Medicare and Medicaid, the government programs that collectively cover over 140 million Americans, although its impact on private insurance remains uncertain.

The pharmaceutical industry has opposed the measure, warning it could reduce funds available for drug research and development. The executive order revives the "most favored nation" pricing concept Trump first introduced during his previous term but that was halted by court challenges and opposition from the industry and some lawmakers.

This approach would align U.S. government drug payments with prices paid internationally, a proposal that remains controversial and has faced significant resistance within Congress, including from some Republicans. While the administration emphasizes opportunities for significant taxpayer savings, it did not provide detailed projections on potential cost reductions.

The Health Department will engage with drug manufacturers over the next month to negotiate new price points. If these talks fail, the agency could adopt new regulatory measures that may take years to implement, particularly affecting Medicare and Medicaid drug pricing. Private insurance drug costs are less likely to be directly affected due to regulatory limitations.

The backdrop includes a bipartisan recognition of the U.S. paying higher drug prices than other wealthy nations. Legislative efforts to empower Medicare to negotiate drug prices for a select group of medications are only set to take effect in 2026. Meanwhile, public scrutiny of drug pricing and industry lobbying efforts continues to grow, placing additional pressure on policymakers and pharmaceutical companies.

Despite opposition, some major pharmaceutical companies saw stock market gains following the announcement, reflecting ongoing investor confidence amidst regulatory uncertainty. The executive order underscores continued federal interest in pharmaceutical pricing reforms as a key healthcare policy issue.