Trump signs executive order setting 30-day deadline for drugmakers to
lower prescription drug costs
[May 13, 2025]
By AMANDA SEITZ and SEUNG MIN KIM
WASHINGTON (AP) — President Donald Trump on Monday signed a sweeping
executive order setting a 30-day deadline for drugmakers to electively
lower the cost of prescription drugs in the U.S. or face new limits down
the road over what the government will pay.
The order calls on the health department, led by Robert F. Kennedy Jr.,
to broker new price tags for drugs over the next month. If deals are not
reached, Kennedy will be tasked with developing a new rule that ties the
price the U.S. pays for medications to lower prices paid by other
countries.
“We're going to equalize,” Trump said during a Monday morning press
conference. “We're all going to pay the same. We're going to pay what
Europe pays.”
It's unclear what — if any — impact the Republican president's executive
order will have on millions of Americans who have private health
insurance. The federal government has the most power to shape the price
it pays for drugs covered by Medicare and Medicaid.
Trump's promised new — but uncertain — savings on drug prices, just
hours after the Republican-led House released its new plan to trim $880
billion from Medicaid.
Taxpayers spend hundreds of billions of dollars on prescription drugs,
injectables, transfusions and other medications every year through
Medicare, which covers nearly 70 million older Americans. Medicaid,
which provides nearly-free health care for almost 80 million poor and
disabled people in the U.S. also spends tens of billions of dollars each
year for drugs.
Top US drugmakers say Trump's order is bad for patients
The nation's pharmaceutical lobby, which represents the top U.S.
drugmakers, immediately pushed back against Trump's order, calling it a
“bad deal” for American patients. Drugmakers have long argued that any
threats to their profits could impact the research they do to develop
new drugs.
“Importing foreign prices from socialist countries would be a bad deal
for American patients and workers," Stephen J. Ubl, the president and
CEO of PhRMA, said in a statement. "It would mean less treatments and
cures and would jeopardize the hundreds of billions our member companies
are planning to invest in America."
Trump's so-called “most favored nation” approach to Medicare drug
pricing has been controversial since he first tried to implement it
during his first term. He signed a similar executive order in the final
weeks of his presidency, which called for the U.S. to only pay a lower
price that other countries pay for some drugs — such as injectables or
cancer drugs given through infusions — administered in a doctor's
office.
That narrow executive order faced hurdles, with a court order that
blocked the rule from going into effect under President Joe Biden's
administration. The pharmaceutical industry argued that Trump’s 2020
attempt would give foreign governments the “upper hand” in deciding the
value of medicines in the U.S.
The concept also remains unpopular with many in his own party. Senate
Majority Leader John Thune, R-S.D., noted to reporters on Monday that it
would be “fairly controversial” if Trump had tried to push through the
policy legislatively, rather than via an executive order.
Trump says other countries are to blame
Trump repeatedly defended pharmaceutical companies, instead blaming
other countries for the high price Americans pay for drugs, during a
wide-ranging speech at the White House on Monday. The president was
flanked by Kennedy, Centers for Medicare and Medicaid Services
administrator Dr. Mehmet Oz, Food and Drug Administration commissioner
Dr. Marty Makary and National Institutes of Health director Jay
Bhattacharya.
He did, however, threaten the companies with federal investigations into
their practices and opening up the U.S. drug market to bring in more
imported medications from other countries.
“The pharmaceutical companies make most of their profits from America,”
Trump said. “That’s not a good thing.”
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President Donald Trump signs an executive order related to drug
prices, in the Roosevelt Room of the White House in Washington,
Monday, May 12, 2025, in Washington. (AP Photo/Mark Schiefelbein)
 Trump played up the announcement
over the weekend, boasting in one post that his plan could save
“TRILLIONS OF DOLLARS."
But on Monday, the White House offered no specifics for how much
money the administration anticipates it could save.
The health department's top leaders will be meeting with drug
company executives over the next 30 days to offer new prices on
drugs that are based off what other countries pay, Oz said on
Monday.
Americans are unlikely to see immediate savings
Americans are unlikely to see relief on rising drug costs quickly
because of the order, said Rachel Sachs, a health law expert at
Washington University.
“It really does seem the plan is to ask manufacturers to voluntarily
lower their prices to some point, which is not known,” Sachs said.
“If they do not lower their prices to the desired point, HHS shall
take other actions with a very long timeline, some of which could
potentially, years in the future, lower drug prices.”
The health department has the most authority to change the prices of
drugs covered by Medicare and Medicaid because it can set
regulations. Even still, the agency's power to do so is limited.
Congress just approved in 2022 a new law that allows Medicare to
negotiate the price it pays for a handful of prescription drugs
starting in 2026. Before the law, Medicare paid what the drug
companies charged. Drug companies unsuccessfully sued over the
implementation of the law.
The price that millions of Americans covered by private insurance
pay for drugs is even harder for the agency to manipulate.
The U.S. routinely outspends other nations on drug prices, compared
with other large and wealthy countries, a problem that has long
drawn the ire of both major political parties, but a lasting fix has
never cleared Congress.
Trump came into his first term accusing pharmaceutical companies of
“getting away with murder” and complaining that other countries
whose governments set drug prices were taking advantage of
Americans.
Trump says he'll ‘do the right thing’
Ahead of the announcement, Trump puffed up his rhetoric toward the
industry again on social media, writing that the
“Pharmaceutical/Drug Companies would say, for years, that it was
Research and Development Costs, and that all of these costs were,
and would be, for no reason whatsoever, borne by the ‘suckers’ of
America, ALONE.”
Referring to drug companies’ powerful lobbying efforts, he said that
campaign contributions “can do wonders, but not with me, and not
with the Republican Party.”
“We are going to do the right thing,” he wrote.
Several pharmaceutical companies gained ground in the stock market
on Monday morning. Merck, a company that made $64.2 billion last
year with the help of its cancer treatment Keytruda, jumped 3.9%.
Pharma giant Pfizer, which notched $63.6 billion in revenue in 2024,
rose 2.5% while Gilead Sciences rose 5.8%.
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Associated Press writers Will Weissert in Washington and Damian
Troise in New York contributed to this report.
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