President Trump took aim at Big Pharma on Monday by signing an executive order meant to slash Americans’ prescription drug prices by up to 90% — sparking a selloff in companies he labeled as “middlemen.”
“What’s been happening is, we’ve been subsidizing other countries throughout the world,” Trump explained at a White House signing ceremony, calling the action one of his “most important orders.”
“Some prescription drug and pharmaceutical prices will be reduced almost immediately by 50 to 80 to 90%,” he added.
The policy is a revival of Trump’s signature “most favored nation” drive from his first term, with a new push to get foreign countries to take on more of the research and development (R&D) costs that experts say America has disproportionately shouldered.
Trump also reiterated his long-standing criticism of companies that own pharmacy benefit managers, like CVS and Cigna, for what he described as their role in distorting drug pricing.
“I would cut out the middlemen,” Trump said.
“Everybody should equalize. Everybody should pay the same price.”
His remarks sent shares of Cigna, one of the nation’s five largest health insurers, plunging nearly 6%, while drugstore giant CVS Health, parent company of Aetna, sank more than 3%.
UnitedHealth Group, which owns OptumRx, dipped less than 1%.
The US pays the highest prices for prescription drugs, often nearly three times more than other developed nations. The order gives drugmakers 30 days to lower the prices of their medicines to align with what other countries pay.
It directs US Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick to “take all appropriate action against unreasonable and discriminatory policies in foreign countries that suppress drug prices abroad,” White House officials said.
After 30 days, Health and Human Services Secretary Robert F. Kennedy Jr. will “set clear targets for price reductions across all markets” in the US and open a “round of negotiations” with industry leaders.
Trump warned that failure to show “significant progress” within six months would trigger further government action, including the potential use of tariffs.
“If they don’t bring their prices down, we’re going to look at using every available tool,” Trump said.
The executive order stopped short of specifying targets or detailing which drugs would be affected.
It also included language instructing agencies to consider allowing direct-to-consumer importation of drugs, as well as restrictions on pharmaceutical exports — both of which could face legal hurdles.
“This order’s suggestion of broader or direct-to-consumer importation stretches well beyond what the statute allows,” warned Paul Kim, a health policy lawyer.
Major US drugmakers initially saw shares tumble on concerns over his “most favored nation” pricing plan, but the sector rebounded after analysts and legal experts said the executive order would be difficult to implement.
“Importing foreign prices from socialist countries would be a bad deal for American patients and workers,” said Stephen Ubl, CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA).
“It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America.”
Ubl said the true drivers of high drug costs include “foreign countries not paying their fair share and middlemen driving up prices for US patients.”
Merck rose 5.9%, Pfizer gained 3.6%, Gilead climbed 7.1% and Eli Lilly was up 2.9%.
The directive also urges the Federal Trade Commission to step up enforcement against what it calls anti-competitive practices by drugmakers, such as patent manipulation and deals to delay the release of generic alternatives.
“President Donald Trump campaigned on lowering drug costs and today he’s doing just that,” said FTC spokesperson Joe Simonson.
Kennedy lauded Trump’s executive order, saying he “never thought that this would happen in my lifetime” and said the policy was the “fulcrum of Bernie Sanders’ runs for presidency [in 2016 and 2020].”
Former President Joe Biden had nixed Trump’s “most favored nation” policy from his first term. Trump chided that his predecessor did so “without any knowledge of what he was doing” and ripped the new drug pricing system that Biden pursued under the Inflation Reduction Act.
