President Donald Trump signed an executive order Monday directing government health insurance agencies to purchase medicine at the lower prices that drugmakers charge in foreign countries.

Under the order, Medicare, the government's health insurance program for the elderly, and Medicaid, the program for people with lower incomes, will offer to pay pharmaceutical companies the lowest prices charged in other developed countries. According to the order, the government will impose prices and take other "aggressive measures" if companies do not offer the drugs at the prices set by the administration.

"We will no longer tolerate profiteering and price gouging from Big Pharma," Trump said in a press conference at the White House.

Trump said the move could cut drug costs by 59% to 90%. 

The order is the latest and most sweeping attempt by the government to lower prescription medication prices, which have long been higher in the U.S. than in other countries. A 2024 study by RAND Corporation found that Americans paid 2.78 times more for the same drugs than in a selection of 33 other countries.

Some drugs are vastly more expensive in the U.S. than in other countries. As of 2023, a monthly dose of the Ozempic diabetes and weight loss drug cost U.S. patients $936 but only $83 for the French, according to an analysis by Peterson-KFF, a nonprofit research group.

Previous administrations have taken action to remedy the discrepancy. Most recently, former President Joe Biden's Inflation Reduction Act bill allowed the government to negotiate prices with drugmakers for the first time. This resulted in prices for 10 drugs being lowered starting in 2026, with more scheduled to follow.

Trump's order spurred pushback from the pharmaceutical industry and could provoke legal challenges, much like Biden's attempt.

"Importing foreign prices from socialist countries would be a bad deal for American patients and workers," Stephen J. Ubl, president of the Pharmaceutical Research and Manufacturers of America, a trade group, said in a statement. "It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America—threatening jobs, hurting our economy and making us more reliant on China for innovative medicines.”