Former U.S. President Donald Trump has stated he plans to sign an executive order that would align American prescription drug prices with the lowest paid by high-income nations. The action, characterized as a "most favored nation" policy of pricing, would address long-standing criticism of exaggerated U.S. drug prices and potentially reshape global pharmaceutical pricing tactics.

Key HighlightsExecutive order on global reference pricing

• Trump said he will sign the order on Monday, instituting international reference pricing.

• The policy would limit U.S. prices for drugs at the rate paid by the most frugal of high-income countries a discount Trump said is 30% to 80% below U.S. prices.

Medicare impact expected

• The order is projected to target Medicare, broadening price limits to drugs already subject to President Biden's Inflation Reduction Act.

• Under Biden's law, Medicare price negotiations will cover 10 drugs in 2026 with more to come.

Industry response and opposition

• The Pharmaceutical Research and Manufacturers of America (PhRMA) decried the plan, saying: "Government price setting in any form is bad for American patients."

• Drug companies are preparing for expanded regulation and look to see the executive order cover a larger number of medicines.

Historical context and legal challenges

• Trump also suggested a similar policy in his first term, which was opposed by U.S. courts.

• The previous version was estimated to save $85 billion over seven years, aiming at more than $400 billion of U.S. yearly drug expenditures.

Trump's new effort at international reference pricing may dramatically remake U.S. pharma policy and could even set global price benchmarks. While embraced by affordability advocates, the action is strongly opposed by drugmakers and will likely reopen arguments over price control, innovation, and access.