President Trump signed an executive order on Monday hoping to slash the cost of prescription drug prices by aligning what the government and American consumers pay for medicines with lower prices paid for these drugs in foreign countries.

The executive order, “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients,” directs the Office of the U.S. Trade Representative and Secretary Lutnick to “take all appropriate action against unreasonable and discriminatory policies in foreign countries that suppress drug prices abroad,” White House officials said.

The order also calls on the health and human services secretary, Robert F. Kennedy Jr., to start negotiations with pharmaceutical companies to encourage “most favored nation prices,” meaning drug costs in America should be tied to the lowest prices paid for the same drugs in other developed countries.  

The order is a revival and expansion of Mr. Trump’s “most favored nation” policy from his first term — struck down by the courts — to force other developed nations to shoulder some of the research and development costs associated with pharmaceutical production. Much of that cost is currently paid for by the American public in the form of prescription drug costs and tax monies to fund Medicaid and Medicare.  

“Starting today, the United States will no longer subsidize the healthcare of foreign countries,” Mr. Trump, flanked by Mr. Kennedy, said at the executive order signing. “Basically what we’re doing is equalizing.”

Mr. Trump used the word “equalize” several times in the press conference — his signature branding of the initiative. He said America accounts for only 4 percent of the world’s population but contributes two-thirds of pharmaceutical companies’ profits. Americans lead the world in per capita prescription drug spending, accounting for more than 30 percent of the global market and 45 percent of global pharmaceutical sales. 

“This means American patients were effectively subsidizing socialist healthcare systems in Germany, in all parts of the European Union, they were the toughest of all. They were nasty,” Mr. Trump said.

The order also instructs Mr. Kennedy to “facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers that sell their products to American patients at the most-favored-nation price.” Mr. Trump predicts drug prices could come down as much as 90 percent. 

Mr. Trump insisted, “This is not price controls.” He spoke, though, about “redistribution of wealth” and sounded more like a Bernie Sanders progressive than a Republican.

Brand-name drug prices in the United States are more than four times as much as prices in other Organization for Economic Co-operation and Development countries, according to the RAND Corporation — and as much as 10 times higher than in certain nations. Generic drugs, though, are slightly cheaper here than in other countries. Mr. Trump gave some examples of price disparities during the executive order signing, mentioning GLP-1 drugs like Ozempic specifically, which Mr. Trump referred to as the “fat shot drug.” 

Messrs. Trump and Kennedy said pharmaceutical companies and their powerful lobbyists have for years insisted that high prices are necessary to pay for research and development. A White House official said that “by making other developed nations also contribute a fair share to research and development budgets we don’t anticipate a negative impact on innovation.”

Mr. Trump echoed this. “I think the healthcare company should make pretty much the same,” Mr. Trump said about concerns pharmaceutical innovation will be hampered by this policy. “It’s just a redistribution of wealth. It’s a redistribution where it could be the same top line, but it’s going to be distributed differently. Europe is going to have to pay a little bit more, the rest of the world is going to have to pay a little bit more, and America is going to pay a lot less.”

The chief executive of the trade group Pharmaceutical Research and Manufacturers of America, Stephen Ubi, says the Trump administration is right to use trade negotiations to force foreign companies to pay their “fair share” for pharmaceuticals. Yet, he says, “importing foreign prices from socialist countries would be a bad deal for American patients” and “would mean less treatments and cures.”

On the campaign trail, Mr. Trump criticized Vice President Harris’s anti-price-gouging proposal for groceries, calling it “communist.” Yet White House officials denied any similarity to the order at hand. “This isn’t price fixing per se, but we are — what we are doing here is kind of fixing the market and allowing market forces to operate in a way they’re supposed to to deliver price relief for the American people,” an official said.  

Mr. Kennedy said that members of Congress are cowed into submission by the industry but that Mr. Trump “can’t be bought.” In many ways Mr. Trump’s actions are an example of the horseshoe theory of politics in action.

“Every major Democratic leader for 20 years has been making this promise to the American people,” Mr. Kennedy said. “This was the fulcrum of Bernie Sanders’s run for the presidency.”

A Democratic congressman, Ro Khanna, posted to X that he supports the president’s initiative and would be willing to help him codify it in law. “Instead of an EO that will be challenged by Big Pharma, why not work with @BernieSanders & me to make this law!”