President Donald Trump announced he will sign a sweeping executive order on Monday aimed at cutting the cost of some medications by tying Medicare reimbursements to the lowest prices paid in other developed nations. The move revives a controversial "Most Favored Nation" policy blocked during his first term and signals a renewed push to confront pharmaceutical pricing ahead of November's elections.
"I will be instituting a MOST FAVORED NATION'S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World," Trump wrote Sunday on Truth Social. "Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%."
The policy, if implemented, would direct the Department of Health and Human Services to benchmark what Medicare pays for drugs administered in doctors' offices - such as cancer treatments and other injectables - against the lowest rate available among peer countries. These medicines fall under Medicare Part B, which accounted for $33 billion in federal spending in 2021.
Trump's announcement revives a plan first introduced in 2018 and finalized in late 2020, only to be blocked by court orders and dropped by the Biden administration. The courts ruled that the Centers for Medicare and Medicaid Services (CMS) failed to follow proper rulemaking procedures. Under Biden, the proposal was officially rescinded in 2022 following concerns it could limit access to care and strain providers.
Robert F. Kennedy Jr., Trump's Health and Human Services Secretary, hinted at the plan last week. "Right now, the big impediment is really price," Kennedy told Newsmax, referencing skyrocketing costs for drugs like Ozempic. He acknowledged that expanding government coverage for such treatments could strain private insurance systems: "If we made that so that Medicaid, Medicare paid for it... we would double the cost of health insurance to most employers in this country."
Though the Trump administration estimates potential savings in the trillions, outside projections have been more modest. A prior model in 2020 suggested roughly $86 billion in savings over seven years. The White House has not yet detailed which drugs will be affected under the new order.
The pharmaceutical industry is expected to fiercely oppose the executive order. During Trump's first term, major drugmakers warned that pegging U.S. prices to international levels would "give foreign governments the upper hand" in determining medicine values and reduce investment in research and innovation. Lobbyists also challenged the legality of the model, successfully stalling its rollout.
Trump, who has frequently accused pharmaceutical firms of "getting away with murder," lashed out again on Sunday. "Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs... borne by the 'suckers' of America, ALONE," he posted. He added that "campaign contributions can do wonders, but not with me, and not with the Republican Party."
The policy would not apply to the vast majority of prescriptions filled at pharmacies, which fall under Medicare Part D. Instead, it would focus on Part B drugs administered during doctor visits - where Medicare beneficiaries often shoulder significant out-of-pocket expenses without a spending cap.
