Trump Signs Executive Order to Slash Prescription Drug Prices, Targeting Seniors’ Costs
WASHINGTON, May 12, 2025 — President Donald Trump signed a sweeping executive order Monday aimed at dramatically reducing prescription drug prices in the United States by tying payments from government programs like Medicare to the lowest prices paid in other developed nations.
The order revives and expands the “most favored nation” pricing model, first proposed during Trump’s first term and later shelved by the Biden administration. It requires Medicare and Medicaid to pay no more than the lowest price available for certain prescription drugs in countries such as Canada, Germany, and the United Kingdom.
Americans will no longer be forced to pay almost three times more for the exact same medicines,” Trump said at the White House. “We’re going to pay what Europe pays. It’s only fair.
The administration claims the move could slash prices for some drugs by as much as 90%. The order gives pharmaceutical companies 30 days to voluntarily reduce prices before federal regulators pursue formal enforcement mechanisms, including antitrust reviews and potential loss of federal purchasing contracts.
Impact on Seniors and Medicare Beneficiaries
Older adults, particularly those enrolled in Medicare, are expected to benefit most from the executive order. Many rely on high-cost medications for chronic conditions such as diabetes, heart disease, and Alzheimer’s.
“Prescription drugs are the single biggest out-of-pocket medical expense for seniors,” said Tricia Neuman, former senior vice president at Kaiser Family Foundation.
Linking U.S. prices to what other countries pay could ease that burden significantly—if the policy survives expected legal and industry challenges.
However, the immediate effects are uncertain. Implementation depends on voluntary compliance from pharmaceutical companies, and legal battles are expected.
Drug Costs in Long-Term Care Facilities
The executive order could also reduce the overall cost of extended care services in long-term care facilities, where prescription drug expenses add to the overall cost of extended care.
According to the LTC News Cost of Care Calculator, the national median monthly cost for a semi-private room in a nursing home exceeds $10,500 a month in 2025. An additional 25% of that cost in skilled nursing settings is tied to pharmaceuticals—especially for residents with multiple chronic conditions.
Much of the cost of long-term care services is paid out of pocket or through Medicaid for those with limited financial resources. Long-Term Care Insurance will pay for long-term care services, but it won't pay for medications as that is tied to Medicare and supplements.
What’s Next
Health and Human Services Secretary Robert F. Kennedy Jr. has been tasked with negotiating price reductions directly with pharmaceutical companies. If voluntary reductions are not reached by June, the administration plans to issue new regulations forcing price alignment through Medicare purchasing guidelines.
The order also authorizes expanded drug importation from countries with lower costs, like Canada, and accelerates the approval of generic and biosimilar alternatives.
While the pharmaceutical industry has pushed back, arguing that such pricing measures could hinder innovation and lead to drug shortages, the administration insists that affordability must come first.
Innovation doesn’t help the American people if they can’t afford the medicine,” said Kennedy. “This is about putting patients first—especially seniors, veterans, and people in long-term care.
Legal and Market Uncertainty
Policy analysts caution that implementation may be delayed by lawsuits from the pharmaceutical industry. A similar executive order issued in 2020 was blocked in court before it could take effect.
Still, public support for drug price reform remains high. A 2024 Gallup poll found that 72% of Americans over age 50 support federal intervention to limit drug prices.
The politics of prescription drug reform have shifted,” said Neuman. “Voters, especially older ones, expect real action—and this order signals that the pressure to deliver is only intensifying.
Bottom Line
The executive order may mark a turning point in the U.S. approach to prescription drug pricing, with the potential to ease financial pressure on seniors, Medicare, and the long-term care system. But it will take time, legal clarity, and industry cooperation to determine whether the savings are real—and lasting.