Trump Revives ‘Most Favoured Nation’ Drug Pricing Policy To Slash Costs By Up To 80%

The former President announces executive order tying US drug prices to lowest rates paid globally, reigniting a long-standing policy battle.

May 12, 2025, New Delhi: US President Donald Trump announced that he will sign an executive order to implement a “Most Favoured Nation” (MFN) policy on prescription drug pricing, aiming to cut drug costs by 30% to 80% by aligning prices with the lowest paid by any high-income country. This renewed push follows the policy’s previous legal hurdles and aims to expand drug pricing reforms beyond the scope of the Inflation Reduction Act introduced under Joe Biden’s presidency.

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Key Highlights:

Trump posted on Truth Social that he would sign the executive order on Monday, targeting global parity in drug prices.
The MFN policy, also known as international reference pricing, will ensure the US pays the same price as the lowest-paying nation worldwide.
The initiative is expected to have a broader impact than Medicare’s current price negotiations under Biden’s Inflation Reduction Act.
During his first term, Trump’s similar proposal was blocked by the courts. It was projected to save $85 billion over seven years.
The US currently spends over $400 billion annually on prescription drugs—far higher than any other country.
Industry lobbyists indicate the executive order could cover a much wider drug list than currently targeted programs.

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📊 Context:

With the US population burdened by the world’s highest drug prices, the MFN policy marks a renewed attempt to rein in pharmaceutical costs, particularly for seniors under Medicare. Trump’s move could reshape global pharmaceutical pricing norms and rekindle political debates over market control, affordability, and healthcare access.

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🔖 Tags:

Trump drug pricing, Most Favoured Nation policy, US healthcare, prescription drug costs, Medicare reforms, pharmaceutical industry, Biden Inflation Reduction Act, drug policy 2025, US pharma lobby, executive order

Business Desk