May 15th, 2025
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WASHINGTON (AP) — On Monday, President Donald Trump signed an important order. It gives drug companies 30 days to lower the price of medicines in the U.S. If they don't, the government might pay less for those drugs later.
The order tells the health department, led by Robert F. Kennedy Jr., to try and agree on new prices for medicines in the next month. If they cannot reach agreements, Kennedy will need to make a new rule that links the price the U.S. pays for drugs to the lower prices paid by other countries.
"We will make things equal," Trump said on Monday. "We will all pay the same amount, like people in Europe."
It's not clear how the Republican president's order will affect the millions of Americans who have private health insurance. The government has the most power to control the price of drugs for Medicare and Medicaid.
Trump talked about possible new ways to save money on medicine prices, just a few hours after the Republican-controlled House showed its plan to cut $880 billion from Medicaid.
The group representing the main US drug companies quickly spoke against Trump's plan, saying it was "not good" for American patients.
Stephen J. Ubl, who is in charge of PhRMA, said that using prices from other countries would not be good for American patients and workers. He also said it would lead to fewer treatments and cures, and could put at risk the large amount of money their companies plan to spend in America.
Trump’s idea for Medicare drug prices has been controversial since he first tried to start it. He signed a similar order near the end of his presidency, which said the U.S. should pay less for some drugs, like those given in a doctor’s office, based on what other countries pay.
That limited rule had problems, as a court order stopped it from starting under President Joe Biden's government. The medicine companies said Trump's try in 2020 would give other countries an advantage in choosing how much medicines cost in the U.S.
Trump defended drug companies and blamed other countries for high drug prices in the US during a speech at the White House on Monday. Several health officials were there with him.
However, he threatened the companies with government investigations and said he would let more imported medicines come into the U.S.
"Drug companies earn most of their money from the US," Trump stated. "This is not positive."
Over the weekend, Trump talked a lot about the announcement, saying in one message that his plan could save "trillions of dollars."
But on Monday, the White House did not say exactly how much money they thought they could save.
Oz said on Monday that the health department's main leaders will meet with people from drug companies in the next month. They want to suggest new prices for medicines, based on what other countries pay.
Rachel Sachs, who is a health law expert at Washington University, said it's unlikely Americans will see drug prices go down quickly because of the order.
Sachs said, "It seems the plan is to ask companies that make medicines to reduce their prices, but we don't know by how much. If they don't lower their prices enough, the government will take other steps over a long time, which might reduce medicine prices in the future."
The health department can change the cost of medicines for Medicare and Medicaid by making rules, but its power is limited. In 2022, a new law was approved that allows Medicare to negotiate prices for a few medicines starting in 2026. Before this law, Medicare paid the prices set by drug companies. Drug companies tried to stop the law in court but were not successful.
It's even harder for the agency to control how much millions of Americans with private insurance pay for drugs.
The United States usually pays more for medicines than other big, rich countries. This problem has made both main political parties angry for a long time, but a permanent solution has never been approved by Congress.
When Trump started his first time as president, he said that drug companies were doing very bad things. He also said that other countries that control the price of medicine were taking advantage of people in America.
Before the announcement, Trump criticized drug companies on social media. He said they claimed for years that Americans were the only ones paying for their research and development costs.
He talked about how drug companies try to influence politicians with money. He said this money can help a lot, but not with him or his party.
"We will do what is right," he wrote.
On Monday morning, several drug companies did well in the stock market. Big companies like Merck, Pfizer, and Gilead Sciences saw their share prices go up.
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