Payam Javan: On May 11, President Donald Trump revealed plans to sign an executive order aimed at drastically reducing prescription drug prices in the United States, with effects expected “almost immediately.” The order, set to be signed at the White House, reinstates a 2020 plan introducing a “most favored nation” policy, ensuring that Medicare Part B pays the lowest price for high-cost drugs among peer nations. Trump claimed this could lower drug costs by 30% to 80%, addressing the long-standing issue of Americans paying significantly more—over twice the global average—for medications, as highlighted in a 2024 Department of Health and Human Services report.

Trump criticized pharmaceutical companies for burdening Americans with research and development costs, accusing them of exploiting campaign contributions to maintain high prices. The executive order, which revives a plan that faced legal challenges and an injunction in 2020, is projected to save billions for the federal government, states, and Medicare beneficiaries. Meanwhile, bipartisan lawmakers, including Senators Josh Hawley and Peter Welch, have proposed a related bill to cap U.S. drug prices at the average of six peer countries, with penalties for non-compliance. This initiative seeks to ensure affordability and fairness in drug pricing, building on Trump’s earlier efforts.