Donald Trump Passes Order Asking Pharma Players To Cut Drug Prices, Sets 30-Day Deadline

While shares of pharmaceutical firms initially dipped amid fears of a “most favoured nation” pricing approach, they bounced back and posted gains by the end of trading.

This latest directive aligns with Trump's broader campaign promise to curb everyday costs for Americans, including essentials like food and fuel.

Source : Freepik

In a move aimed at aligning US drug prices with global rates, President Donald Trump on Monday issued an executive order instructing pharmaceutical companies to drastically reduce medicine prices to match those paid in other nations. The directive, which analysts say could prove difficult to enforce, provides a 30-day window for drugmakers to meet specified pricing benchmarks. If companies fail to make "significant progress," additional actions to bring down prices will be taken.

The policy, widely seen as part of Trump’s ongoing effort to address inflation and consumer costs, left industry experts questioning its viability. While shares of pharmaceutical firms initially dipped amid fears of a “most favoured nation” pricing approach, they bounced back and posted gains by the end of trading, reported Reuters.

During a press event announcing the move, Trump emphasised the need for international price parity. “Everybody should equalise. Everybody should pay the same price,” he stated. He warned that the administration would impose tariffs if US prices failed to align with those abroad and said he was seeking reductions of 59 per cent to 90 per cent.

US Prices Among the World’s Highest

The US remains the world’s costliest market for prescription drugs—often paying nearly three times more than other developed countries. Trump previously attempted similar reforms during his first term, but court rulings blocked implementation.

This latest directive aligns with Trump's broader campaign promise to curb everyday costs for Americans, including essentials like food and fuel. He attributed the timing of the order to a conversation with a friend who had received a weight-loss drug for $88 in London—a drug that costs $1,300 in the United States.

If pharmaceutical companies don’t cooperate, the administration plans to explore alternative routes. These include importing drugs from countries with lower prices, placing restrictions on drug exports, and using regulatory powers to enforce compliance. The order also tasks the government with studying the feasibility of allowing direct-to-consumer drug purchases at international price points.

However, trade groups representing the pharmaceutical industry have pushed back hard. Stephen Ubl, CEO of PhRMA, a prominent industry association, criticised the move. "Importing foreign prices from socialist countries would be a bad deal for American patients and workers. It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America," he said. Ubl also pointed to what he described as the real culprits behind high drug prices: “foreign countries not paying their fair share and middlemen driving up prices for US patients.”

Legal and Regulatory Uncertainty Ahead

The order instructs the Federal Trade Commission (FTC) to pursue tough enforcement against anti-competitive practices within the pharmaceutical sector. White House officials pointed to tactics like pay-for-delay agreements, where brand-name drugmakers reach deals with generic competitors to delay cheaper versions from entering the market.

Yet, significant legal hurdles remain. Health policy attorney Paul Kim noted that parts of the executive order, particularly those addressing drug imports, may exceed the scope of current US law. "The order's suggestion of broader or direct-to-consumer importation stretches well beyond what the statute allows," Kim warned.

Legal challenges are expected to surface down the line, most likely after more concrete measures are introduced. “At the point when there are actual consequences and we know what they are, and when companies feel that they have to lower the price of their drugs, at that point we're going to have a flood of litigation,” said Lawrence Gostin, a health law professor at Georgetown University.

Meanwhile, the FTC has been preparing to ramp up scrutiny of pharmaceutical practices. Last month, Trump asked the agency to collaborate with other departments to host public listening sessions on anti-competitive behaviour in the sector.

On Monday, the White House was expected to request that the FTC consider formal enforcement actions. “President Donald Trump campaigned on lowering drug costs and today he’s doing just that. Americans are tired of getting ripped off. The Federal Trade Commission will be a proud partner in this new effort," said FTC spokesperson Joe Simonson.