Trump’s “most favored nation” policy unveiled Monday seeks to ensure that Americans pay for prescription drugs at the same price as those who live in similarly wealthy nations by asking drug manufacturers to voluntarily lower their prices.
The order directs Health and Human Services Secretary Robert F. Kennedy Jr. to create “clear targets” for new drug prices over the next 30 days with the hope of setting off negotiations between drug companies and members of the Trump administration.
If negotiations do not begin in a month, Kennedy will then impose a “most favored nation” pricing model capping U.S. drug prices at the lowest rate paid by similarly wealthy countries.
The executive order states the government will consider expanding drug importation from other countries or taking other regulatory actions if drug manufacturers do not lower the prices for the U.S. soon.
“Basically, all we are doing is equalizing,” Trump told reporters during a Monday press conference about the executive order. “We’re all going to pay the same.”
But Trump did not explain what legal authority the U.S. has to pressure companies to lower the price of their drugs.
Americans pay more for prescription drugs than in other wealthy nations and have done so for decades. One 2024 report conducted by the Rand Corporation found that in general people in the U.S. pay 2.78 times more for medications than those who live in 33 other wealthy countries.
The Trump administration had pressed House Republicans to include the policy in their reconciliation package, but it was absent from the Energy & Commerce Committee’s text released Sunday night. A committee staffer told reporters Monday they have no intention of including the policy in the package.
Trump tried to implement a similar policy to lower prescription drug costs during his first term. But the policy was blocked by a federal judge in 2020.
