“Trump executive order demands pharma industry price cuts”
U.S. President Donald Trump signed a sweeping executive order on Monday directing pharmaceutical companies to reduce prescription drug prices to levels comparable with those in other developed countries. The move is part of a broader effort by the Trump administration to curb rising healthcare costs and fulfill a longstanding campaign promise.
Key Provisions
The order outlines a 30-day timeline for drugmakers to demonstrate “significant progress” toward meeting international pricing benchmarks. If companies fail to comply, the administration will consider additional measures, including direct rulemaking, importation of lower-cost drugs from abroad, and export restrictions on certain pharmaceutical products and ingredients.
The directive also encourages the development of direct-to-consumer purchasing programs, allowing Americans to access medications at prices paid by other nations.
During a press conference, Trump emphasized the need for parity, saying, “Everybody should equalize. Everybody should pay the same price.” He cited an example from a personal acquaintance who reportedly paid $88 for a weight-loss injection in London, compared to $1,300 in the United States.
Industry and Market Reaction
Although the order initially caused concern in the pharmaceutical sector, analysts and investors responded with relative relief, noting the executive order lacked immediate enforcement mechanisms and detailed implementation strategies. Shares of major drugmakers rebounded after early losses, with Merck, Pfizer, Gilead Sciences, and Eli Lilly all posting gains by the end of the trading day.
Industry trade groups were quick to criticize the proposal. Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA), warned that importing foreign price controls “would be a bad deal for American patients and workers” and could undermine future drug development and investment.
Ubl attributed high U.S. drug prices to “foreign countries not paying their fair share” and the influence of intermediaries in the U.S. healthcare system.
Legal and Regulatory Hurdles
Legal experts cautioned that the executive order could face significant challenges in court. Paul Kim, a health policy attorney, noted that the provisions suggesting broader drug importation and consumer-level purchases likely exceed the authority granted under current U.S. law.
Georgetown University law professor Lawrence Gostin predicted extensive litigation once specific enforcement actions are taken. “At the point when there are actual consequences and companies feel pressure to lower prices, we’re going to see a flood of litigation,” he said.
The Federal Trade Commission (FTC), which has been tasked with addressing anti-competitive practices in the pharmaceutical sector, is expected to play a central role. A White House official identified tactics such as “pay-for-delay” agreements with generic manufacturers as a focus of potential enforcement.
FTC spokesperson Joe Simonson expressed support for the initiative, stating, “Americans are tired of getting ripped off. The Federal Trade Commission will be a proud partner in this new effort.”
Context and Outlook
The U.S. pays among the highest prices for prescription drugs globally—nearly three times as much as some other high-income nations. Trump made tackling drug costs a core issue during his presidency, though earlier attempts to introduce “most favored nation” pricing policies were blocked in court.
This latest executive order represents a renewed effort to fulfill that agenda, though its practical outcomes remain uncertain. Analysts say implementation will require navigating complex legal, logistical, and political terrain.
The order also directs the Secretary of Commerce and other federal agencies to explore export dynamics that may be contributing to global price disparities. The Commerce Department has yet to issue a statement on its intended actions.
As the 2024 election approaches, drug pricing remains a politically charged issue—one with significant implications for patients, providers, and pharmaceutical companies alike.
Rewritten: Source article originally posted here: https://www.reuters.com/business/healthcare-pharmaceuticals/trump-says-he-will-cut-drug-prices-by-59-2025-05-12/
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