On May 12, 2025, President Donald Trump announced a significant initiative aimed at reducing prescription drug prices in the United States.

He plans to sign an executive order implementing a “most favored nation” pricing policy, which would align U.S. drug prices with those in other developed countries. This approach could potentially lower drug costs by 30% to 80%, addressing the issue that Americans currently pay nearly three times more for medications compared to residents of other high-income nations.

The executive order will set price targets for pharmaceutical companies, with a 30-day window to respond. If significant progress isn’t made within six months, the administration may pursue additional measures, such as importing medicines from countries with lower prices and enforcing stricter regulations against anti-competitive practices in the industry . The Federal Trade Commission has also been directed to investigate and address any anti-competitive behaviors that contribute to high drug prices.

This policy has elicited varied reactions. While consumer advocacy groups have welcomed the move as a step toward making healthcare more affordable, the pharmaceutical industry has expressed concerns about potential impacts on innovation and revenue. Following the announcement, shares of major U.S. drugmakers experienced declines between 2% and 3%, reflecting investor apprehension about the policy’s implications.

The proposed pricing strategy underscores the administration’s commitment to making healthcare more accessible and affordable. By seeking to reduce the financial burden of prescription drugs, the policy aims to improve access to essential medications for Americans, particularly those reliant on Medicare. However, the success of this initiative will depend on its implementation and the cooperation of various stakeholders in the healthcare sector.