On May 13, U.S. President Donald Trump signed an executive order giving pharmaceutical
companies 30 days to voluntarily lower prescription drug prices — or face new federal rules
tying U.S. drug prices to those paid in other countries. The order empowers Health Secretary
Robert F. Kennedy Jr. to lead negotiations. If deals aren’t reached, the U.S. could adopt a pricing model based on international reference pricing — something Canada has done for decades.

“We’re going to equalize. We’re all going to pay the same. We’re going to pay what Europe
pays,” Trump said.

What’s the Executive Order About?

It demands U.S. drugmakers slash their prices within 30 days or risk a government-
imposed ceiling tied to prices in countries like Canada, the U.K., and France.
It primarily impacts what the U.S. pays for Medicare and Medicaid drugs — covering
nearly 150 million Americans. Trump’s team includes high-profile figures like Robert F. Kennedy Jr., Dr. Mehmet Oz, and Dr. Marty Makary, all pushing the White House’s health agenda.

U.S. Drug Prices: A Long-Standing Issue

Americans consistently pay more for prescription drugs than any other wealthy nation.
According to international comparisons, drug costs in the U.S. can be 2–5x higher than what
Canadians pay for the same medications. Canadian pricing is guided by the Patented Medicine Prices Review Board (PMPRB), which compares prices internationally to ensure Canadians don’t overpay. Trump’s move appears to borrow from this playbook — though it’s controversial even within his own Republican Party.

Pushback from U.S. Pharma

The Pharmaceutical Research and Manufacturers of America (PhRMA) criticized the move,
calling it “a bad deal for American patients and workers,” warning it could limit innovation and
delay access to new treatments.

“Importing foreign prices from socialist countries would be a bad deal for American patients,”
said PhRMA CEO Stephen Ubl.

Why Should Canadians Care?
While the executive order targets U.S. domestic policy, there could be spillover effects:

1. Cross-Border Impact: U.S. drugmakers may attempt to raise prices in Canada or limit
   supply to maintain higher profit margins.
2. Parallel Import Pressures: Trump hinted at increasing drug imports from countries
   like Canada — a move that has raised concern among Canadian health officials worried
   about domestic shortages.
3. Global RD Investment: If U.S. pharmaceutical profits shrink, investment in Canadian
   RD and clinical trials could decline, potentially slowing access to new treatments.

What Comes Next?

For now, the order is largely symbolic — it gives the health department time to negotiate but
lacks teeth unless further regulations follow. Americans are unlikely to see price drops
overnight, and much will depend on how the pharmaceutical industry responds.
But this executive order signals a renewed appetite for aggressive drug pricing reform in the
U.S. — a space where Canada has long been a model, and now, potentially, a benchmark.

Canadian takeaway: As the U.S. explores adopting an international pricing model, Canada
could find itself at the center of the conversation — both as a pricing example and as a potential
source of cheaper drugs for a much larger market to the south.

Stay tuned on our blog — this 30-day deadline could shake up North American pharmaceutical markets.

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