President Donald Trump has signed a new executive order aimed at cutting the high cost of prescription drugs in the United States. The move, announced Monday, demands that Americans pay no more than the lowest price charged for the same medication in other countries. Trump said the U.S. has been overpaying for years while foreign nations pay far less for the same drugs.

“From now on, the United States stops supporting the healthcare bills of foreign countries,” Trump said at the signing. He claimed the order could slash U.S. drug prices by up to 90%.

A Bold Move: U.S. Demands Global Price Matching

The executive order introduces a policy known as the “Most Favored Nation” rule. Under this rule, drug companies must match the lowest price offered in any major country when selling in the U.S. The Department of Health and Human Services (HHS) has 30 days to finalize these new pricing rules.

“If pharmaceutical companies don’t follow the rules, we’ll use every tool the government has,” Trump stated. He also warned of additional actions if prices are not brought down quickly.

Strong Enforcement Plan in Place

The order includes measures to enforce the new pricing system. If companies refuse to comply, the government may:

• Expand drug imports from other countries
• Allow the FDA to review or revoke drug approvals
• Limit the sale of high-priced medications

This policy is broader than Trump’s earlier attempt in 2020, which targeted Medicare drugs. That plan was blocked in court, and later reversed by President Joe Biden. The current order, however, applies to all U.S. drug markets — not just Medicare.

Global Tensions Rise Over Drug Pricing

Trump accused foreign governments of forcing American companies to lower prices abroad while charging more at home. He pointed directly at the European Union, calling their tactics “worse than China’s” and warned of trade consequences.

“If they don’t stop, we’ll hit them with tariffs,” Trump said. “They won’t be selling cars here if they keep playing games.”

Trade officials are also considering tariffs on imported drugs, which some experts worry could raise U.S. prices or cause shortages.

Industry Reacts: Support Mixed with Caution

The drug industry has responded with both support and concern. Stephen Ubl, head of the Pharmaceutical Research and Manufacturers of America (PhRMA), said, “It’s right to demand that other countries pay their share.” But he warned that importing prices from abroad could slow innovation and increase U.S. reliance on China.

Ubl also noted that the policy could impact new drug development, leading to fewer life-saving treatments.

Experts Say Immediate Impact May Be Limited

Market analysts are not expecting big changes overnight. Evan Seigerman of BMO Capital Markets called the order “mostly symbolic,” saying Congress may still need to pass a law to make the plan stick.

He added that legal questions remain and warned that court challenges could delay or block parts of the order.

Why U.S. Drug Prices Are So High

Americans often pay much more for the same medications than patients in other countries. A 2022 government report found that U.S. drug prices are nearly 2.8 times higher than in other wealthy nations. Brand-name drugs cost more than three times as much in the U.S., even after rebates.

The new policy challenges long-standing global pricing systems and could pressure other governments to raise prices — or risk losing access to U.S. markets.

Reaching Beyond Medicare

While recent laws gave Medicare some power to negotiate prices, Trump’s order covers all drug purchases — including those through Medicaid and private insurance. Trump said this is not “price control,” but a way to stop unfair pricing systems that hurt American families.

He also directed U.S. trade agencies to fight foreign pricing strategies that lead to higher U.S. costs.

Cutting Out the Middlemen

Another key part of the plan targets pharmacy benefit managers, or PBMs. These are the companies that negotiate prices between drugmakers and health insurers. Trump said they often drive up costs instead of lowering them.

The executive order asks HHS to create a way for patients to buy medicine directly from drug companies, bypassing PBMs.

This builds on an earlier order from April that supported importing cheaper drugs from Canada and gave Medicare more power to bargain with suppliers.

Will Americans See Lower Prices Soon?

Trump claims Americans will start saving fast. On his social media platform, he promised that drug prices could fall by 30% to 80%, with an average drop of 59%. He also suggested global prices may rise to match U.S. rates — leveling the playing field.