President Trump has promised to cut prescription drug prices through executive orders, with his administration claiming reductions of 30 to 80 percent “almost immediately.” However, his previous attempt to implement a similar drug pricing strategy in 2020 failed completely—blocked by federal courts before a single patient benefited. The same legal challenges that derailed his first-term order remain unresolved, raising serious questions about whether his 2025 executive orders will fare any better. Understanding what happened to Trump’s prior drug pricing efforts is essential to evaluating whether his current promises can actually be delivered. Trump’s first-term executive order on drug pricing, signed in September 2020, directed Medicare to use “Most Favored Nation” pricing—paying no more than the lowest price manufacturers charge in other developed countries.
This sounded straightforward: if a drug costs $100 in Germany and $300 in America, Medicare would pay the German price. But within months, pharmaceutical companies sued, and federal courts temporarily blocked the rule in December 2020. The Biden administration officially rescinded it in December 2021. Trump’s second-term effort, announced in May 2025, proposes a similar model, but without addressing why courts rejected the first attempt or how the legal obstacles will be overcome.
Table of Contents
- What Did Trump’s 2020 Drug Pricing Order Actually Try to Do?
- Why the Courts Killed the 2020 Order—and the Problem Isn’t Solved
- Trump’s 2025 Executive Order—Same Policy, Different Strategy?
- How Most Favored Nation Pricing Actually Works—And Why It’s Complicated
- The Timeline Reality—Don’t Expect Immediate Price Drops
- Comparing Trump’s Approach to Biden’s Medicare Drug Negotiation Program
- What’s Really at Stake for Patients—And What Could Go Wrong
- The Bottom Line—Past Performance Doesn’t Guarantee Future Results
- Conclusion
What Did Trump’s 2020 Drug Pricing Order Actually Try to Do?
In September 2020, trump signed Executive Order 13948, titled “Lowering Drug Prices by Putting America First,” which directed the Department of Health and Human Services to implement Most Favored Nation pricing for Medicare Part B drugs. The order specifically called for testing this model on 50 drugs initially, using reference prices from Germany, France, the United Kingdom, and Japan as benchmarks. The theory was elegant: force American drug manufacturers to charge Medicare what they already charged other wealthy nations, eliminating what Trump administration officials called the “price discrimination” that made American patients subsidize the world’s drug development. The implementation plan relied on regulation rather than legislation. HHS was supposed to draft rules establishing a payment model where Medicare would reimburse physicians based on the lowest price the same drug sold for in comparable developed nations.
For example, if a cancer treatment cost $5,000 per month in France but $10,000 in the United States, Medicare would refuse to pay more than the French price. In theory, manufacturers would either accept lower reimbursement or lose Medicare patients entirely. The order projected significant savings—one analysis suggested it could save Medicare billions annually by bringing American prices into alignment with international rates. However, Trump’s administration never had to find out whether the policy would work. Before the regulations were even finalized, pharmaceutical manufacturers and industry groups filed lawsuits challenging the executive order’s legal authority. They argued that the statute governing Medicare payments didn’t permit the Most Favored Nation approach and that the order exceeded the president’s authority under existing law.
Why the Courts Killed the 2020 Order—and the Problem Isn’t Solved
In December 2020, just three months after Trump signed the executive order, federal district courts issued preliminary injunctions blocking the rule from taking effect. The judges found that the pharmaceutical companies had likely demonstrated that the order exceeded the president’s legal authority. Specifically, courts ruled that the Medicare statute (Title XVIII of the Social Security Act) gave HHS authority to set payment rates, but not through the method Trump’s order proposed. The statute required specific procedural steps that the executive order essentially bypassed. This wasn’t a close legal call. The courts found that existing law explicitly constrained how Medicare could set drug prices, and an executive order—no matter how well-intentioned—couldn’t override that statutory framework. When the Biden administration took office in January 2021, it chose not to appeal these decisions. Instead, it rescinded the rule entirely on December 29, 2021.
This wasn’t a policy disagreement; it was a legal defeat. The courts had effectively said that Trump’s approach required Congress to change the law, not just a presidential directive. The critical problem is this: the underlying legal barriers that killed Trump’s 2020 order haven’t changed. Congress hasn’t rewritten the Medicare statute to authorize Most Favored Nation pricing. The same provision of law that courts cited in blocking the 2020 order remains in effect. This means Trump’s 2025 executive order on the same topic faces identical legal jeopardy. Unless Congress passes legislation specifically authorizing MFN pricing, the courts may simply block this order the same way they blocked the first one. Trump’s administration could argue that the circumstances are different or that judges were wrong, but the statutory framework hasn’t budged.
Trump’s 2025 Executive Order—Same Policy, Different Strategy?
On May 12, 2025, Trump signed a new executive order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” reviving his 2020 strategy. This time, Trump claimed even more aggressive results: prices would drop 30 to 80 percent “almost immediately,” with an overall 59 percent reduction by aligning with other nations’ prices. To make this appear more viable than his 2020 attempt, Trump announced that nine major pharmaceutical companies—Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Genentech, Gilead Sciences, GSK, Merck, Novartis, and Sanofi—had signed agreements to voluntarily lower prices. This is the critical difference: instead of forcing compliance through regulation, Trump is now working with manufacturers who have allegedly agreed to the lower prices. The administration projects $7.2 billion in collective savings for Medicare beneficiaries, affecting 11 million enrollees through a $2,000 annual drug spending cap in 2025.
The companies theoretically benefit by maintaining volume and market access, while patients benefit from lower prices. This sounds like a win-win, but there are major caveats. First, these are voluntary agreements, not mandates. If a manufacturer decides the deal is unprofitable, it can exit. Second, the administration launched TrumpRx.gov, a platform allowing patients to access discounts on high-priced medications, but the discounts depend on manufacturer participation, not government enforcement. Third, and most importantly, getting nine companies to agree doesn’t address the core legal problem: if the government later tries to mandate MFN pricing across all drugs and manufacturers, it will face the same court challenges that blocked the 2020 order.
How Most Favored Nation Pricing Actually Works—And Why It’s Complicated
The MFN concept is superficially simple but operationally complex. The United States is the only wealthy nation without government price controls on pharmaceuticals. Other developed nations—Germany, France, the UK, Japan, Australia—either negotiate prices directly with manufacturers or allow government agencies to refuse to reimburse drugs deemed too expensive. This creates a natural price gradient: manufacturers charge lower prices in countries with price controls and higher prices in America to offset lower profits elsewhere. Most Favored Nation pricing attempts to break this strategy by pegging American reimbursement to the lowest international price. In theory, if Medicare pays the same as France, manufacturers can’t subsidize European price controls with American profits. The model has appealing logic: American patients stop being overcharged simply because they live in an unregulated market. However, implementation creates serious complications. Which countries count as “comparable developed nations”? Do you include Australia’s aggressive price negotiation? Do you average prices across five countries or use only the lowest? These questions sound technical but determine whether a drug price drops 10 percent or 50 percent.
A real example: a hepatitis C treatment might cost $10,000 per course in America, $3,000 in Germany, and $5,000 in France. Under MFN pricing, does Medicare pay $3,000 (the lowest)? Or $4,000 (the average)? The difference matters enormously. Set it too low, and manufacturers stop producing drugs for the American market or refuse to develop new treatments. Set it too high, and savings disappear. Trump’s administration hasn’t clarified these methodological questions, leaving major uncertainty about actual price reductions. Additionally, MFN pricing might reduce prices for some drugs while having no effect on others. For cancer drugs developed and marketed primarily in America with limited international sales, there may be no “international reference price” to anchor to. For older drugs with generic competition in other nations, the MFN price might already reflect what patients pay. This selective impact means that while some patients could see dramatic savings, others might see none.
The Timeline Reality—Don’t Expect Immediate Price Drops
Despite Trump’s claim that prices will drop “almost immediately,” healthcare experts point out that actual implementation could take “months or years,” even if the legal and regulatory obstacles are cleared. This isn’t because the administration is dragging its feet. It’s because the drug supply chain and pricing infrastructure can’t change overnight. Prices are embedded in contracts, insurance formularies, and pharmacy benefit manager agreements that typically renew annually. Even if a manufacturer agrees to lower a drug’s price, that lower price doesn’t automatically flow to patients’ pharmacy counters within days. Consider a real example: a patient with rheumatoid arthritis takes a biologic drug that costs $6,000 per month under her insurance plan. Even if the manufacturer agrees to drop its price to $2,000, her insurance company’s formulary—the list of covered drugs and their tiers—may not update immediately.
The pharmacy benefit manager negotiates rebates and coverage terms with insurers, a process that typically happens annually. The patient’s copay, which is based on formulary placement and insurance contracts, won’t drop until these contracts are renegotiated. The result: a manufacturer’s agreement to lower prices might not translate to lower copays for six months to two years. This timeline gap creates a political problem for Trump. When he claims prices will drop “almost immediately,” patients and advocates will interpret that as weeks, not years. When actual price reductions take a year or more to materialize (if they materialize at all), the perception will be that the order failed or was a hoax, even if legitimate savings are eventually achieved. Trump’s 2020 order faced this problem in miniature before courts blocked it; his 2025 order will face it throughout 2026 and beyond as the gap between promises and reality becomes apparent.
Comparing Trump’s Approach to Biden’s Medicare Drug Negotiation Program
Biden’s administration took a different approach to drug pricing: Medicare price negotiation. Under the Inflation Reduction Act passed in 2022, Medicare could directly negotiate prices with manufacturers for 10 specific high-cost drugs. This process resulted in the first cycle of negotiations in 2024, with Medicare securing an average 38 to 79 percent discount off list prices. The first ten negotiated drugs achieved $6 billion in collective Medicare savings compared to 2023 spending. These negotiated prices took effect in 2026, projected to save Medicare an additional $1.5 billion that year. A second cycle expanded to 15 additional drugs, with implementation in 2027. Biden’s approach differs fundamentally from Trump’s MFN model.
Rather than pegging prices to international reference points, Medicare directly negotiated with manufacturers based on clinical value, cost-effectiveness, and volume. Manufacturers participated because Congress tied participation to being eligible for Medicare and Medicaid coverage—effectively making negotiation mandatory for major drugs. The legal authority came directly from legislation Congress passed, not from executive interpretation of existing statutes. The key advantage of Biden’s model is that it actually worked before courts could intervene. The disadvantage is that it covers only ten drugs in the first cycle (expanding to 25 by 2026). Most prescriptions are for drugs outside these negotiation lists. Trump’s MFN model, if it worked, could theoretically apply more broadly, but it faces the legal and implementation hurdles discussed above. The contrast is stark: Biden achieved concrete, measurable savings through legislation and direct negotiation, while Trump is trying to achieve broader savings through executive order and voluntary manufacturer cooperation—an approach that already failed once in court and may fail again.
What’s Really at Stake for Patients—And What Could Go Wrong
Trump’s drug pricing orders appeal to a genuine problem: Americans do pay higher prices for pharmaceuticals than patients in other developed nations. A diabetic patient might pay $300 monthly for insulin in America while the same insulin costs $30 in Canada. This price disparity is real, and it harms patients who can’t afford medications or delay taking them due to cost. Any policy that reduces these prices has potential merit. The question is whether Trump’s approach can deliver without creating new problems. The risk is that aggressive price controls—whether through MFN mandates or manufacturer pressure—could reduce pharmaceutical companies’ U.S. profits to the point where they shift research away from American patients.
If profits from the American market decline significantly, companies might deprioritize developing drugs for conditions that primarily affect Americans, reduce clinical trials in the United States, or slow the pace of innovation overall. This isn’t hypothetical: it’s a concern that pharmaceutical companies have raised repeatedly, and it’s one reason Congress has been cautious about price controls. Whether the concern is legitimate or overblown, it’s a risk that comes with aggressive pricing policies. A second risk is that Trump’s voluntary agreements with nine companies might not stick. These agreements aren’t binding laws; they’re corporate commitments that can change if a new executive takes office, if companies face financial pressure, or if they decide the political risk of breaking the agreement is acceptable. Unlike Biden’s legislative approach—which required Congress to authorize negotiations and explicitly tied participation to Medicare coverage—Trump’s agreements lack enforceability. A company could agree to lower prices in 2025 and raise them again in 2027 with little legal recourse.
The Bottom Line—Past Performance Doesn’t Guarantee Future Results
Trump’s 2020 drug pricing order demonstrates that executive action on this issue faces serious legal constraints. His 2025 order, while using a different tactical approach through voluntary manufacturer agreements and TrumpRx.gov, doesn’t solve the underlying legal problem. If he tries to mandate MFN pricing across all drugs and manufacturers, courts will likely challenge it the same way they challenged the 2020 order. If he relies only on voluntary agreements, savings will be limited and potentially temporary.
For patients, the hard truth is that there’s no quick fix for drug pricing without congressional action. Biden’s approach required legislation. Trump’s approach, for all its boldness, cannot legally require price controls without Congress rewriting the Medicare statute to authorize them. Patients should monitor actual price changes and insurance coverage over the next 12 to 24 months, keeping in mind that even legitimate manufacturer price reductions may take months or years to reach their pharmacy copays. Claims of “immediate” or “dramatic” savings should be treated skeptically; meaningful price reductions happen gradually, if they happen at all.
Conclusion
Trump’s promise to cut prescription drug prices through executive order echoes his first-term effort from 2020, which promised similar savings but was blocked by federal courts before implementation. His current approach combines a new voluntary agreement strategy with MFN pricing rhetoric and the TrumpRx.gov platform, attempting to work around the legal obstacles that killed the 2020 order. However, the fundamental legal problem remains: the Medicare statute likely doesn’t authorize MFN pricing without congressional authorization, a constraint that courts identified and that hasn’t been resolved.
Patients should view Trump’s drug pricing orders as addressing a real problem—Americans do pay higher prices than people in other wealthy nations—but should be realistic about what executive action can achieve. Meaningful, sustained price reductions require either congressional legislation (as Biden attempted through negotiation authority) or voluntary manufacturer compliance (which may be temporary and limited in scope). The gap between Trump’s claims of “almost immediate” 30 to 80 percent price drops and the months or years actually required for price reductions to reach patients’ copays is the most honest measure of what to expect. Watch for actual insurance formulary changes and copay reductions in 2026 and beyond; that’s when the promises will either be validated or shown to be empty.