Trump Announces Plan to Lower Drug Prices

A day after announcing a new policy on medicine, President Donald Trump announced that the government will cut prescription drug prices by 59 percent.

Trump shared that he plans to sign an executive order to lower medicine costs quickly. In a post on X (formerly Twitter), he said the U.S. will start a "Most Favoured Nation Policy," meaning the country will only pay as much for drugs as the nation paying the lowest price in the world. Following his announcement, shares of several big U.S. drug companies, including Merck, Pfizer, Bristol-Myers Squibb, and Eli Lilly, dropped before markets opened in New York. Drug companies in Japan and Europe also saw share prices fall.

Trump’s plan follows earlier efforts by former President Joe Biden, whose Inflation Reduction Act (2022) lets the government bargain prices for some expensive Medicare drugs. So far, only a few drugs have been included, but more could be added every year. Medicines given by doctors have not yet been part of these talks, though that might change soon. It’s still unclear whether the new rule will affect only government programs like Medicare and Medicaid or include more medicines and people.

Some experts say Trump's earlier comments, suggesting it should be illegal for drug companies to charge Americans more than they charge people in other countries, may have influenced this policy. Drugmakers had previously taken the government to court over similar ideas during Trump’s presidency.