Overview

• President Donald Trump signed an executive order on May 12, 2025, aiming to reduce U.S. prescription drug prices by 30% to 80% through international reference pricing.
• The policy mandates that U.S. drug prices align with those paid by the lowest-cost nation worldwide, with reductions promised to take effect almost immediately.
• Pharmaceutical companies face pressure to comply voluntarily or risk federal enforcement, as stated by Trump during the announcement.
• Critics warn of potential global price increases and economic ripple effects, particularly in Europe, where pharmaceutical costs may rise to offset U.S. reductions.
• The White House has yet to provide detailed implementation plans, while industry opposition and legal challenges loom over the decree's viability.