President Donald Trump signed a new executive order this week directing pharmaceutical companies to lower U.S. drug prices to match the costs paid by other countries—a dramatic-sounding move that analysts say lacks enforceability, legal authority, and a viable path to implementation.
The order, issued Monday, frames the high cost of U.S. prescription drugs as the product of an inequitable global system. “Drug manufacturers, rather than seeking to equalize evident price discrimination, agree to other countries’ demands for low prices, and simultaneously fight against the ability for public and private payers in the United States to negotiate the best prices for patients,” the order states. “The inflated prices in the United States fuel global innovation while foreign health systems get a free ride.”
To correct this imbalance, the order instructs Health and Human Services Secretary Robert F. Kennedy Jr. to “facilitate direct-to-consumer purchasing” and push drug manufacturers to “sell their products to American patients at the most-favored-nation price”—that is, the lowest price those drugs are sold for in any other developed country.
If drugmakers do not comply within 30 days, Kennedy is empowered to “propose [a] rulemaking plan to impose” pricing changes. However, the order does not specify how such changes would be implemented, nor does it make clear whether the administration has the legal authority to enforce them without congressional action. Even the idea of importing drugs “on a case-by-case basis” from lower-cost nations is framed as something the secretary may merely “consider.”
Healthcare policy analysts and legal experts quickly noted that the order offers no clear mechanism to force compliance. Courts blocked Trump’s earlier attempts to enforce similar pricing regulations during his first term, and the administration’s latest plan is expected to face similar legal hurdles.
Despite its lofty language, the executive order was met with relief from the pharmaceutical industry and investors. In a note to clients, Wall Street firm Jefferies characterized the action as “better than feared” for drugmakers. Pharmaceutical stocks, which had dipped in advance of the announcement, rebounded after the order’s release.
Speaking at the signing ceremony, Trump attempted to shift blame away from drug companies. “I’m not knocking the drug companies. I’m really more knocking the countries than the drug companies. … We’re going to help the drug companies with the other nations,” he said.
He also floated the possibility of using tariffs to force foreign governments to raise their drug prices, threatening European auto exports as leverage. “If they want to get cute, then they don’t have to sell cars into the United States anymore,” Trump said. “And we will add it onto the price that we charge them for doing business in America. In other words, we’ll add it on to tariffs.”
This latest executive order follows previous promises to bring U.S. drug prices in line with international norms. Trump said the directive was inspired in part by a friend who had recently purchased a weight-loss drug for $88 in London, compared to $1,300 for the same medication in the U.S.
But critics argue that the order is unlikely to achieve meaningful results and may serve more as a symbolic gesture than a policy with real outcomes. Sen. Bernie Sanders (I-Vt.) issued a statement calling the directive insufficient and legally vulnerable.
“If Trump is serious about making real change rather than just issuing a press release, he will support legislation I will soon be introducing to make sure we pay no more for prescription drugs than people in other major countries,” Sanders said. “If Republicans and Democrats come together on this legislation, we can get it passed in a few weeks.”
In contrast to claims that high U.S. prices are necessary to support innovation, recent research challenges the pharmaceutical industry’s justification. A 2024 study from Bentley University concluded that public investment—particularly through National Institutes of Health grants—and small biotech firms are driving the majority of new drug development. “It’s these little companies where the investment in innovation is happening,” said Fred Ledley, senior author of the study. “We don’t think they’re going to be adversely affected” by fair pricing laws.
Earlier research by the National Academy for State Health Policy reached similar conclusions. “Drug makers claim high prices are necessary to support new drug development and innovation,” wrote then-policy associate Sarah Lanford in 2021, “but research shows that public investment in drug research and development combined with large industry profits leaves manufacturers room to lower prices while continuing to innovate.”
While Trump’s order claims to target global price inequities, analysts warn that obtaining “most-favored-nation” pricing could actually result in pharmaceutical companies raising prices abroad rather than lowering them at home. Critics say that without the power to compel compliance, the administration is left with vague threats and potential litigation—neither of which guarantees lower prices for U.S. patients.
Congress, controlled by Republicans in both chambers, could pass legislation granting more authority to negotiate prices or enforce cost ceilings. But no such bill has yet advanced, and the administration has shown little interest in pursuing that path.
In the absence of enforceable regulation or bipartisan legislation, Trump’s executive order appears to leave Americans in the same position they’ve long endured: paying the highest prescription drug prices in the world, while drug companies and investors continue to profit.
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