Trump Again Promises Lower Drug Prices By 'Cutting Out Middlemen' Like UnitedHealth, CVS: Will It Work This Time?

President Donald Trump on Monday signed a sweeping executive order aimed at drastically reducing prescription drug prices in the U.S.

What Happened: The Trump administration wants to tie drug prices to the lowest amount paid in comparable foreign countries — a policy known as “most-favored-nation” pricing.

The executive order is a response to what Trump described as “unreasonable or discriminatory” practices abroad.

"In case after case, our citizens pay massively higher prices than other nations pay for the same exact pill, from the same factory, effectively subsidizing socialism aboard [abroad] with skyrocketing prices at home," Trump said in a statement. 

Drug manufacturers have 30 days to voluntarily lower prices for prescription drugs in the U.S. to match those paid in other advanced nations. 

If companies do not comply, the Department of Health and Human Services, led by Robert F. Kennedy Jr., is tasked with developing rules to enforce most-favored nation (MFN) pricing or other regulatory measures. 

The HHS is also instructed to establish mechanisms for Americans to purchase drugs directly from manufacturers at the MFN price, bypassing pharmacy benefit managers (PBMs) and other intermediaries. 

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Why It Matters: The executive order is a rare show of common ground between the Trump administration and Democratic leaders like Senator Bernie Sanders, who has long fought for laws aimed at making medicine more affordable.

And Trump has tried this before. During his first term, he signed a similar order that the courts ultimately blocked after the pharmaceutical industry lobbied against it.

Sanders fears the same thing might happen again. In a post on the Bluesky social network, he agreed that it is “an outrage that the American people pay, by far, the highest prices in the world for prescription drugs.”

“As Trump well knows, his executive order will be thrown out by the courts,” said Sanders. “If Trump is serious about making real change rather than just issuing a press release, he will support legislation I will soon be introducing to make sure we pay no more for prescription drugs than people in other major countries. If Republicans and Democrats come together on this legislation, we can get it passed in a few weeks.”

Pharmaceutical stocks dropped in Monday's premarket trading, but recovered into positive territory by the market close.

Analysts and investors decided the order was less-specific than feared and likely to be challenged in court. 

"A drug pricing announcement had been expected for a while now and had weighed on stocks in this sector, so the official executive order doesn’t seem to be impacting sentiment too much,” said James Harlow, senior vice president at Novare Capital Management, per Reuters. 

In contrast, Trump’s comments of “cutting out the middlemen” weighed on shares of companies that own pharmacy benefit managers like The Cigna Group CI, CVS Health Corp. CVS and UnitedHeath Group Inc. UNH. 

"I would cut out the middlemen," Trump said. "Everybody should equalize. Everybody should pay the same price."

Shares of UnitedHealth plunged Tuesday after the company pulled its 2025 outlook, citing that care activity continued to accelerate and CEO Andrew Witty unexpectedly resigned. 

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What To Watch: The executive order threatens the PBM business model by enabling direct-to-consumer drug purchases, which could significantly reduce the need for PBMs’ negotiating and administrative services. However, legal experts have raised concerns about the legality of direct-to-consumer sales. 

"This order's suggestion of broader or direct-to-consumer importation stretches well beyond what the statute allows," warned health policy lawyer, Paul Kim, per the New York Post. 

Investors in the healthcare sector may choose to mitigate risk and exposure to PBMs through a diversified healthcare ETF like the SPDR Select Health Care Sector Fund XLV which holds shares of pharmaceuticals, health care equipment and supplies and health care providers. 

An ETF like the iShares U.S. Medical Devices ETF ITI which tracks the Dow Jones U.S. Select Medical Equipment Index and invests in leading U.S. medical device companies also offers exposure to the healthcare industry while reducing exposure to pharmaceutical benefit managers. 

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