On May 12, 2025, President Donald Trump issued a sweeping executive order that set out to tackle rising drug prices in the United States. The executive order requires the Department of Health and Human Services (HHS) to negotiate lower prices directly with pharmaceutical companies or implement a rule to base U.S. drug prices off of other developed countries. Given that Americans pay the highest prices for prescription drugs in the world, the executive order was a strong political and economic statement to make healthcare more affordable.
The 30-Day Countdown Begins
As specified by the order, HHS has 30 days to move forward. Suppose negotiations between drug manufacturers and HHS do not result in “somewhat” meaningful price reductions. In that case, HHS should establish a regulation that keeps US prices to pay for drugs to no more than the “most favored nation price,” which is the cheapest price charged to countries like the UK, Canada, Germany, or Japan. The tight time frame creates enormous pressure on the federal government and pharmaceutical companies to reach a prompt and meaningful agreement. The Biden Administration hopes that this timeframe will prevent any further delays in policy implementation and provide immediate relief for millions of patients.
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Political Reaction and Industry Pushback
While supporters have praised the executive order as a major populist victory, pharmaceutical companies and critics say the executive order could backfire. Pharmaceutical executives say if U.S. prices are tied to international markets it will reduce innovation and simply delay new drugs’ unwavering commercial debut. Others viewed it as a political move in an election season. Healthcare advocacy groups seen positivity in this step, with many believed this would finally address the affordability gap and bring transparency to the opaque price-setting system.
Conclusion
Whether this order leads to a lasting policy change or is just a stopgap, its progress will be under a magnifying glass. With the deadline of 30 days fast approaching, the next few weeks could be pivotal in changing how Americans pay for their medicine.
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