Overview

• President Donald Trump signed an executive order to cap U.S. prescription drug prices at the lowest rates paid in other developed countries, aiming for reductions of 30–80%.
• The 'Most Favored Nation' policy applies broadly to all medicines, marking a significant expansion beyond prior Medicare-focused efforts.
• Federal agencies, including HHS, FDA, DOJ, and FTC, are directed to set price targets, negotiate with drugmakers, enforce anti-competitive rules, and explore drug importation to lower costs.
• Pharmaceutical industry groups criticized the policy, warning it could stifle innovation and face legal challenges, as a similar initiative was blocked in court during Trump’s first term.
• The administration projects the policy will save the U.S. healthcare system trillions of dollars, though implementation complexities and potential legal battles remain significant hurdles.