Trump announces plan to cut U.S. drug prices with ‘most favored nation’ policy

President Donald Trump announced plans to sign an executive order that would significantly reduce prescription drug prices in the United States by linking them to the lowest prices paid in other countries.

The policy, described by Trump as a 'Most Favored Nation' approach, is expected to bring down U.S. drug prices by between 30 and 80 percent, according to the president. He said the executive order will be signed at 9 a.m. Monday.

What the Executive Order Does

The order directs the Department of Health and Human Services to tie what Medicare pays for medications administered in doctors’ offices to the lowest amount paid by any other country. Trump emphasized the move is designed to 'bring fairness to America' after years of paying higher prices than other developed nations.

How the Policy Could Work

Under the 'most favored nation' pricing strategy, the U.S. would pay no more than the lowest price paid for a drug in countries with similar economies. Trump claimed the result would be a significant reduction in American prescription costs, while prices abroad may rise to balance the global market.

'They will rise throughout the world in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA!' Trump wrote in a social media post.

A Renewed Push on Drug Pricing

This isn’t the first time the Trump administration has attempted to lower drug prices. A similar initiative during his first term failed amid strong opposition from the pharmaceutical industry. Last month, Trump signed a separate executive order aiming to allow states more flexibility in negotiating lower drug costs and importing medications from abroad.

Industry Reaction and What Comes Next

The White House has not yet released full details of the policy or how it would be implemented. While the administration touts the move as a major reform, it is expected to face scrutiny from pharmaceutical companies and possibly legal challenges.

The executive order is scheduled to be signed Monday morning.