PULSE POINTS:
❓What Happened: President Donald J. Trump signed an Executive Order implementing a “most favored nation” prescription drug pricing policy that could cut pharmaceutical costs by anywhere between 30 and 80 percent for Americans.
👥 Who’s Involved: President Trump, Medicare, foreign nations, the pharmaceutical industry.
📍 Where & When: The order was signed on Monday, May 12, 2025, at the White House.
💬 Key Quote: “We are going to pay the lowest price there is in the world. Whoever is paying the lowest price, that is the price we’re going to get—so we’re no longer paying ten times more than another country,” President Trump said after signing the Executive Order.
⚠️ Impact: The new drug pricing plan aims to significantly lower the costs for prescription drugs purchased through Medicare, providing savings for both the U.S. government and Americans enrolled in the federal health insurance program.
IN FULL:
President Donald J. Trump has signed an Executive Order establishing a “most favored nation” policy that will tie Medicare payments for pharmaceuticals administered by a medical doctor to the lowest price paid by other countries. The directive aims to bring down the cost of prescription drugs in the United States and provide significant savings to the federal government through reduced Medicare costs. Notably, the Trump White House contends the policy could cut pharmaceutical costs by anywhere between 30 and 80 percent for Americans.
The “most favored nation” pricing policy has been a long-standing goal for President Trump. An attempt to implement the plan late in his first term was sidelined after a federal court blocked the directive. However, according to Trump, the newest iteration will not only be implemented through his Executive Order but will also be codified into law as part of the budget reconciliation bill taking form in Congress.
“We are going to pay the lowest price there is in the world. Whoever is paying the lowest price, that is the price we’re going to get—so we’re no longer paying ten times more than another country,” Trump said after signing the order in the Oval Office on Monday. He continued: “I’m doing this against the most powerful lobby in the world, probably—the drug lobby and pharmaceutical lobby—but it’s one of the most important orders, I think, that’s ever been signed.”
The America First leader added: “Big Pharma will either abide by this principle voluntarily, or we’ll use the power of the federal government to ensure that we are paying the same price as other countries.”
.@POTUS on Most Favored Nation prescription drug pricing: “We are going to pay the lowest price there is in the world. Whoever is paying the lowest price, that is the price we’re going to get — so we’re no longer paying ten times more than another country.” pic.twitter.com/IdckTkObE0
— Rapid Response 47 (@RapidResponse47) May 12, 2025
While the specifics of the Executive Order and legislative provisions are not entirely known as of the time of publication, a “most favored nation” pricing policy essentially means the United States government will only pay pharmaceutical companies for a drug covered under Medicare at the lowest rate paid by similar advanced nations. For instance, while a pharmaceutical company might charge the federal government $300 for a specific medication, if that same medication is sold to the German government for just $30, by law, the U.S. government will only pay $30 instead of the higher price.
It is expected that Trump’s Executive Order will face a number of legal challenges from the pharmaceutical industry.