From CNBC: 2025-05-12 09:31:00

President Donald Trump is reviving a policy to cut drug costs by tying government payments to lower prices abroad. U.S. drugmakers like Eli Lilly and Pfizer saw shares drop ahead of the announcement. The policy will target drugs with high costs, possibly including weight loss and diabetes treatments. Trump claims prices will drop by 59%.

The order aims to crack down on foreign countries’ policies that suppress drug prices. The administration will negotiate with pharmaceutical companies to ensure fair pricing. Unlike the U.S., other countries with universal coverage have leverage to set lower drug prices. The goal is to encourage drugmakers to offer lower prices to reciprocate U.S. actions.

Trump’s order also directs agencies to consider expanding drug imports from other developed nations. The order is part of efforts to lower U.S. prescription drug prices, which are significantly higher than in other developed countries. The pharmaceutical industry has pushed back against the policy, citing potential profit losses and impacts on research and development.

The industry’s largest trade group estimated that Trump’s Medicaid proposal could cost drugmakers up to $1 trillion over a decade. Some experts doubt the effectiveness of a “most favored nation” drug pricing policy in lowering costs. Legal challenges from the pharmaceutical industry could hinder the policy’s implementation, but Medicare drug price negotiations are another tool to address prices.



Read more at CNBC: Trump to sign most favored nation drug pricing order