President Donald Trump is set to sign a sweeping executive order on Monday, May 12, 2025, aimed at significantly reducing prescription drug costs in the United States. The order seeks to align U.S. drug prices with lower rates paid in other wealthy nations, potentially slashing costs by up to 59% [1][2][3].

The policy, described as a reimagined and more aggressive version of Trump's previous attempt during his first term, introduces a 'most favored nation' pricing model. This approach would cap U.S. prices at the lowest rates paid by other economically advanced countries [1][2].

White House officials stated, "For too long, foreign nations have been able to free ride off of the American people, and American patients forced to pay for too much for prescription drugs" [2]. They emphasized that "the president is dead serious about lowering drug prices" [2].

Key aspects of the executive order include:

Directing Health and Human Services Secretary Robert F. Kennedy Jr. to establish price-cutting goals within 30 days [1] Initiating negotiations between Kennedy and the drug industry [1] Enforcing the 'most favored nation' pricing model if talks stall [1]

The announcement has already impacted the pharmaceutical industry, with shares of major U.S. drugmakers dropping in premarket trading. Eli Lilly saw a decline of more than 5%, while Pfizer, Merck, and Johnson & Johnson experienced drops of over 2% [2][3].

However, the specific medications that will be affected by this order remain undisclosed. White House officials indicated that the scope of this policy would be broader than Trump's previous attempt, which was blocked by a federal judge [1][2].

As with the earlier version, health policy experts anticipate significant pushback from the drug industry [1]. The implementation and effectiveness of this executive order will likely face scrutiny in the coming weeks and months.