Trump signs executive order to slash drug prices, expand state import options

US President Donald Trump signed an executive order on Tuesday to lower drug prices by allowing states to negotiate more freely overseas and streamlining the price negotiating process.

Americans have the world’s highest prescription medicine prices, forcing many consumers to pay largely out of cash despite already pricey insurance rates.

“This (order) will provide meaningful relief to seniors and low income individuals who depend on insulin and many, many more,” a White House official told reporters.

“Furthermore, it will foster a more competitive prescription drug market to ensure the prices being charged to patients and the government are more aligned with the value they provide, rather than some quirk in the way that the government pays for them.”

The decision orders the Food and Drug Administration (FDA), which oversees prescription and over-the-counter drugs, to allow additional states to import medicines directly from lower-cost countries.

Last year, the administration of Trump’s predecessor, Joe Biden, accepted Florida’s application to import from Canada, but no other states received approval for their own arrangements.

The directive also modifies the Inflation Reduction Act (IRA) signed by Biden, which permitted Medicare health insurance coverage for seniors to negotiate prescription pricing for the first time.

The reforms attempt to remove the imbalance between price negotiating procedures for tablets and injectable pharmaceuticals, which opponents fear might hinder investment in orally delivered treatments.

Under the IRA, Medicare could negotiate on prices for “small molecule” drugs that patients swallow, such as ibuprofen, nine years after FDA approval.

“Large molecule” biologics such as gene-based therapies and hormonal regulators could only be subject to negotiations after 13 years.

The order did not specify how the disparity would be addressed.

Officials said the edict also did not make use of a “most favored nation” status that would force pharmaceutical companies to offer their lowest prices in America.

Biden’s IRA reforms led to the costs of 10 key medicines being cut in landmark negotiations with pharmaceutical firms.

Days before leaving office, the Democrat announced a further 15 drugs for which the government would negotiate lower prices with pharmaceutical companies, with the resulting prices taking effect in 2027.