President Trump signed an executive order on May 12, 2025, aimed at reducing U.S. pharmaceutical costs by up to 90% by linking prices paid by government programs like Medicare to lower rates charged in foreign countries.
The policy directs U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick to counter foreign policies that suppress drug prices abroad, forcing higher U.S. costs. Health and Human Services Secretary Robert F. Kennedy Jr. will set price reduction targets and negotiate with the pharmaceutical industry. The FDA will expand drug imports from countries beyond Canada to lower costs, ensuring safety standards are met. The Justice Department and Federal Trade Commission will tackle anti-competitive practices to further drive prices down.
The policy directs U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick to counter foreign policies that suppress drug prices abroad, forcing higher U.S. costs. Health and Human Services Secretary Robert F. Kennedy Jr. will set price reduction targets and negotiate with the pharmaceutical industry. The FDA will expand drug imports from countries beyond Canada to lower costs, ensuring safety standards are met. The Justice Department and Federal Trade Commission will tackle anti-competitive practices to further drive prices down.
Trump emphasized fairness, arguing that the U.S., with less than 5% of the global population, accounts for 75% of pharmaceutical profits, subsidizing other nations’ healthcare systems. White House officials deny the policy is price control, framing it as enabling market forces. Critics’ concerns about stifling innovation were dismissed, with officials asserting the U.S. shouldn’t solely fund global drug innovation. Trump also vowed to target pharmacy benefit managers, criticized as costly middlemen, to further reduce prices.