US President Donald Trump signed a wide-reaching executive order on Monday directing drugmakers to lower the prices of their medicines to align with what other countries pay, which analysts and legal experts said would be difficult to implement.

The order gives drugmakers price targets in the next 30 days, and will take further action to lower prices if those companies do not make “significant progress” towards those goals within six months of the order being signed.

Trump told reporters that the government would impose tariffs on companies if the prices in the US did not match those in other countries and said he was seeking cuts of between 59 per cent and 90 per cent.

“Everybody should equalise. Everybody should pay the same price,” Trump said.

Investors were sceptical about the order’s implementation, and shares, which had been down overnight on the threat of “most favoured nation” pricing, recovered and rose in early morning trade on Monday.

Trump said his order on drug prices was partly a result of a conversation with an unnamed friend who told the president he got a weight loss injection for $88 in London and that the same injection in the US cost $1,300.

If drugmakers do not meet the government’s expectations, it will use rulemaking to bring drug prices to international levels and consider a range of other measures, including importing medicines from other developed nations and implementing export restrictions, a copy of the order showed.

The order also directs the US Federal Trade Commission to consider aggressive enforcement against what the government calls anti-competitive practices by drugmakers.

The executive order is likely to face legal challenges, particularly for exceeding limits set by U.S. law.

Global repricing

Trump’s move to sign an executive order to cut prescription drug prices could lead to a global price adjustment with pharma firms pushing lower-cost countries like India to raise prices, according to the economic think tank GTRI.

“It is likely to trigger a global price recalibration, with pharmaceutical giants intensifying pressure on lower-cost markets like India to raise their prices by tightening patent laws through trade negotiations,” Global Trade Research Initiative (GTRI) founder Ajay Srivastava said on Monday. He said that India must respond with strategic clarity and unyielding resolve.