U.S. President Donald Trump signed an executive order on Monday aimed at slashing prescription drug prices by aligning them with international rates. The move directs pharmaceutical companies to meet government-set pricing targets within 30 days or face further regulatory action, including possible tariffs and rulemaking to enforce price reductions.
Trump cited a personal anecdote of a weight-loss drug costing $88 in London versus $1,300 in the U.S. as a motivator. The U.S. continues to pay the highest prices for medications globally—nearly three times more than other developed nations. Trump emphasized that Americans should pay no more than patients in other countries, echoing his long-standing campaign promise to fight inflation and reduce consumer costs.
The order proposes allowing direct-to-consumer drug imports and explores export restrictions for pharmaceutical ingredients contributing to domestic price gaps. It also instructs the Federal Trade Commission to crack down on anti-competitive practices in the industry, such as pay-for-delay deals that prevent cheaper generics from entering the market.
Despite initial investor concerns, the pharmaceutical sector rebounded, with shares of major drugmakers like Pfizer, Merck, and Gilead Sciences climbing after the order’s announcement. Analysts and legal experts noted the plan lacks detailed implementation strategies and is likely to face legal challenges over its scope, particularly regarding drug imports and international price benchmarking.
Industry trade group PhRMA criticized the move, calling it a threat to innovation and warning it could reduce investment in new treatments. Still, the administration insists the order is a bold step toward fair drug pricing and consumer relief.
As legal battles loom, the effectiveness of the order will hinge on its enforcement—and whether it survives scrutiny from both courts and powerful industry players.