Key Points – Former President Donald Trump announced an executive order intended to slash prescription drug prices by 30% to 80% using a “most favored nation” policy, meaning the U.S. would pay the lowest global prices.
-While appealing, significant doubts persist regarding Trump’s legal authority to implement price controls without congressional approval.
-Critics argue that unilateral executive action cannot regulate private sector pricing, labeling the plan economically damaging and potentially unconstitutional.
-Trump, who previously criticized similar proposals as “Soviet-style,” faces bipartisan skepticism. With the pharmaceutical industry opposed and constitutional challenges looming, the promised dramatic price drop appears unlikely without clear legislative backing, raising questions about the order’s effectiveness.
Trump Has A Plan to Cut Drug Prices That Looks Unconstitutional
After several days of teasing a major announcement, President Donald Trump on Sunday revealed what it was: An executive order that would unilaterally reduce drug prices.
Set to be signed on Monday morning, per the president’s Truth Social post, the executive order declares that “Prescription Drug and Pharmaceutical prices will be REDUCED, almost immediately, by 30% to 80%. They will rise throughout the World in order to equalize and, for the first time in many years, bring FAIRNESS TO AMERICA!”
This will be done through a “most favored nation” policy in which, per Trump, “the United States will pay the same price as the Nation that pays the lowest price anywhere in the World.”
Very few people would disagree with the idea of lower drug prices, and if the order happened the way Trump wants it to, that would be a great thing for everyone. However, the question is whether the president has the authority to reduce drug prices via an executive order unilaterally.
Can He Do It?
It would not appear that reducing the prices of a good, via executive order, is something that the president has the power to do.
“I genuinely don’t understand where the president would possibly get the authority to impose price controls on all of the products private companies in an industry make,” financial journalist James Surowiecki called it on X. “‘Calling it a ‘Most Favored Nation’ policy doesn’t magically give you price-control power.”
Former Rep. Justin Amash declared on X that “Trump supports economically foolish price controls for prescription drugs and pharmaceuticals and will sign an executive order to sidestep Congress and the Constitution…again.”
The Wall Street Journal editorial page, last week, when the drug prices order was being rumored, described it as “Trump’s Worst Idea Since Tariffs.”
“Savings from Mr. Trump’s drug plan would be negligible, and the scheme would harm innovation and raise prices for Americans with private insurance,” the Journal says.
The idea, at least in the short term, is to make it appear that anyone critical of Trump’s drug prices plan, either on feasibility or constitutional grounds, is “siding with Big Pharma.” But indeed, the pharmaceutical industry has already come out against the plan, with Alex Schriver, senior vice president of Pharmaceutical Research and Manufacturers of America, telling the Journal that “government price setting in any form is bad for American patients.”
A Flip-Flop on Price Controls
Trump himself, as well as many of his top loyalists, have in the past argued against “price controls,” which is something that Republicans have often accused Democrats of wanting to pursue.
In the 2024 campaign, when Kamala Harris called for a ban on price gouging, Trump assailed the plan as “Soviet-style.” Florida Republican Attorney General Ashley Moody, who had enforced that state’s own anti-price gouging law, bashed Harris’ plan as “communist-style price control.”
Stephen Miller, now Trump’s deputy chief of staff, used similar language last year about Harris’ plan.
A Different Plan
During the Biden Administration, a plan was instituted to allow Medicare to negotiate the prices of prescription drugs, which the administration announced in late 2024 had led to “an estimated $6 billion in savings for the federal government and a $1.5 billion reduction in out-of-pocket costs for seniors.”
This involved Medicare directly negotiating and was passed legislatively as part of the Inflation Reduction Act. Trump’s Truth Social post does not talk about Medicare, nor does it say anything about legislation.
Then there’s the question of what will happen to drugs produced in other countries. Novo Nordisk, the company that makes the popular drug Ozempic, is based in Denmark and would appear to be outside of the authority of a U.S. president.
At any rate, it’s not clear where things will go with Trump’s order, but what’s almost certain not to happen is an instant, uncomplicated, and unambiguous drop in pharmaceutical prices, just because the president said so.
About the Author
Stephen Silver is an award-winning journalist, essayist and film critic, and contributor to the Philadelphia Inquirer, the Jewish Telegraphic Agency, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. For over a decade, Stephen has authored thousands of articles that focus on politics, technology, and the economy. Follow him on X (formerly Twitter) at @StephenSilver, and subscribe to his Substack newsletter.
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