In a sweeping executive order (EO) signed May 12, 2025, President Donald Trump directed the federal government to implement a “most-favored-nation” pricing model for prescription drugs, aiming to dramatically reduce costs for American consumers. The order asserts that Americans—who make up less than 5% of the global population—are subsidizing roughly 75% of worldwide pharmaceutical profits through inflated drug prices.
Under the executive order, U.S. agencies are instructed to pursue the lowest prices paid by any economically comparable country. If pharmaceutical manufacturers do not voluntarily align with these targets, the Department of Health and Human Services (HHS) is directed to impose new rulemaking to enforce such pricing. The order also calls for enabling direct-to-consumer sales at international benchmark prices and contemplates potential drug importation if safety and cost criteria are met.
The directive outlines broad enforcement powers across federal departments, including antitrust investigations by the Department of Justice and FTC and a possible review of FDA drug approvals. It signals a hardline stance against what the order calls “global freeloading” and price discrimination that shifts the burden of R&D costs to American patients.
While the executive order does not immediately impose changes, it mandates quick agency action and communications with drug manufacturers, marking a significant policy shift with potentially far-reaching implications for the pharmaceutical industry, federal trade policy, and American consumers.
The Executive Order is available via this link.