May 15th, 2025
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President Trump signed a paper on Monday. It says drug companies have 30 days to make medicine cheaper in the U.S. If they don't, the government will decide later how much it will pay for the medicine.
The government wants the health department, led by Robert F. Kennedy Jr., to negotiate new prices for medicines next month. If they don't reach agreements, Kennedy will be responsible for creating a new regulation. This regulation will link the price the U.S. pays for medications to the lower prices paid by other countries.
"We will make things equal," Trump said. "Everyone will pay the same. We will pay the same as Europe."
We don't know if the president's order will change things for the millions of Americans with private health insurance. The government can best control the price of medicines for Medicare and Medicaid.
Trump said he would save money on medicine, but it was not certain. This happened after the House of Representatives showed their plan to cut a lot of money from Medicaid.
Drug companies in the country did not like Trump's plan. They said it was not good for American people who need medicine. Drug companies often say that if they make less money, they cannot do as much research to make new medicines.
Bringing in prices from other countries would be bad for sick Americans and people who work here. This would mean fewer ways to treat sickness and find cures. It would also put at risk the large amount of money our companies want to invest in America.
Trump wanted the U.S. to pay less for some medicines, like cancer drugs given at the doctor's. He signed a paper saying the U.S. should pay the same low price as other countries.
That small rule had problems. A court said it could not start when Joe Biden was president. Drug companies said that President Trump's idea from 2020 would help other countries decide how much medicines cost in the U.S.
On Monday, Trump gave a speech at the White House. He said that other countries were the reason why Americans pay a lot for medicine, not the companies that make the medicine. He was with important people like Kennedy and doctors from different health groups.
But he said he would investigate the companies and let more medicines from other countries come into the U.S.
Trump said that drug companies make most of their money from America. He said that is not good.
Last weekend, Trump said the announcement was very important. He wrote that his plan could save a lot of money, even 'TRILLIONS OF DOLLARS.'
But on Monday, the White House did not say how much money they think they could save.
The main people at the health department will meet with the heads of drug companies next month. They will talk about new prices for drugs. These prices will be like the prices in other countries, Oz said on Monday.
Rachel Sachs, an expert in health laws, said Americans probably won't see the cost of medicine go down fast because of the order.
Sachs said the plan is to ask companies to lower their prices, but we don't know how much. He also said that if companies don't lower prices enough, the government will do other things over a long time. These things might lower drug prices later.
The health department can change the cost of some medicines that Medicare and Medicaid pay for. But their power to do this is not complete. In 2022, a new rule was made that lets Medicare ask for lower prices for some medicines starting in 2026. Before this rule, Medicare paid the price the companies asked for. Medicine companies tried to stop this rule, but they did not win.
It is even harder for the agency to change the price of medicines for millions of Americans who have private insurance.
In the U.S., people usually pay more for medicine than in other rich countries. Both main political groups are angry about this, but they haven't found a way to fix it.
When he became president, Trump said that companies making medicine were doing very bad things. He also said that other countries were taking advantage of Americans because their governments decided how much medicine should cost.
Before the announcement, Trump was angry with the drug companies on social media. He said the companies always said that research and development cost a lot. He also said that only people in America had to pay these costs for no reason.
He said that money from drug companies helps them a lot, but it doesn't change his mind or the mind of his party.
"We intend to act in a way that is morally correct," he stated.
Some companies that make medicine did well on the stock market on Monday. For example, the shares of Merck went up by 3.9%, Pfizer's shares went up by 2.5%, and Gilead Sciences' shares went up by 5.8%.
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