May 12 (UPI) -- U.S. President Donald Trump signed an executive order in the White House on Monday to reduce drug prices in the United States by between 30% and 80% with the aim of equalizing global prices.
The executive order aims to rein in the price that the United States pays for prescription drugs, paying equal to the lowest price of other developed countries. The policy is referred to as the "Most favored nations" policy.
"Starting today, the United States will no longer subsidize the healthcare of foreign countries, which is what we were doing," Trump said during a press conference. "They paid a small fraction for the same drug we pay many many times more for."
Trump added that he has "great respect" for pharmaceutical companies and feels that they were taken advantage of by other countries and the European Union.
"We will no longer tolerate profiteering and price gouging from 'big pharma.' But again it was really the countries that forced 'big pharma' to do things that, frankly, I'm not sure they felt comfortable doing," he continued. "But they've gotten away with it, these countries. The European Union has been brutal."
Trump said he expects drug prices to come down 59% to 90% in some cases. No details of the executive order were released, and it was not immediately clear how exactly the order would work.
The president did not clarify what drugs would be subject to the executive order but he spoke at length about weight loss drugs like GLP-1 medications and gave examples of the cost of drugs used to treat breast cancer.
Trump also did not specify which countries the United States will target.
"We're using the term 'other developed countries' because some countries need some additional help and I think that's fine," Trump said.
The president was joined at the press conference by National Institute of Health Director Jayanta Bhattacharya, Administrator for the Centers for Medicare and Medicaid Services Mehmet Oz, Secretary of Health and Human Services Robert F. Kennedy Jr. and FDA Commissioner Marty Makary.
Trump had tried during his first term to institute a Most Favored Nation policy via executive order to tie U.S. prescription drug prices for Medicare to the world's cheapest price tags but was met with successful legal challenges from the pharmaceutical industry.
PhRMA, a pharmaceutical trade group, criticized the original version of the plan from Trump's first term as "bad policy," stating it will limit seniors' access to existing medicine and hamper development of new drugs.
Dr. Houman David Hemmati, a California physician and critic of California' s Democratic governor, Gavin Newsom, said the policy is "a strong step toward fairness" but does present risks.
On X, he said it could limit patient access to drugs in those countries where the drugs' prices are cheapest, as drug makers might pull out of those markets. It could also affect development, especially of generic drugs, which could also be pulled from shelves.
"A generic priced very low abroad might disappear if the U.S. demands that price, impacting access to essentials like insulin," he said, adding that countries reliant on low prices might face drug access issues, and the United States might see delays in new drug launches.
According to a January 2024 report from the Health and Human Services' Office of the Assistant Secretary for Planning and Evaluation, the prices across all drugs in the United States were at least 2.78 times higher than in comparison countries and at least 3.22 times as high for brand drugs.
In his Sunday night statement, Trump said that with his new policy, "Our Country will finally be treated fairly and our citizens Healthcare Costs will be reduced by numbers never even thought of before."
He said the United States will save trillions of dollars.
In April, Trump signed an executive order directing the Department of Health and Human Services to standardize Medicare payments to reduce the price of prescription drugs.
