U.S. President Donald Trump has signed a sweeping executive order aimed at driving down prescription drug prices in the United States by pressuring foreign nations and pharmaceutical companies. The directive, framed as a move to “equalize” drug costs globally, proposes linking U.S. medication prices to those in countries where they’re cheaper, including Canada. However, Canadian officials and health policy experts believe the plan is unlikely to disrupt the domestic market.
The new policy gives U.S. Health Secretary Robert F. Kennedy Jr. one month to negotiate lower prices with major drugmakers. If those talks fail, Kennedy will be tasked with implementing a regulation that ties U.S. drug costs to those paid by countries with lower rates. Trump stated the goal is for the U.S. to pay less while the rest of the world pays more. Despite the rhetoric, experts say the policy is more symbolic than practical, with limited risk to Canada’s prescription drug supply.
Michael Law, a health policy professor at the University of British Columbia, explains that Canada’s drug pricing system is insulated from U.S. policies. The Patented Medicine Prices Review Board (PMPRB) regulates maximum prices for patented medicines in Canada and uses an international benchmark system that does not include the United States. As such, changes in American drug pricing policy won’t directly affect how prices are set in Canada. The board can also enforce price reductions or recoup excess revenues if pharmaceutical companies charge more than allowed.
While Trump’s order also revives the decades-old idea of importing cheaper medications from Canada, experts doubt this will occur at a significant scale. Pharmaceutical companies are unlikely to allow cross-border arbitrage that undermines their U.S. profits. Canada also lacks the production capacity to supply large volumes of drugs to the U.S. without compromising its own supply, according to Law. Health Canada has stated it will act swiftly to block any export practices that could trigger domestic shortages.
Meanwhile, Trump’s push for drug importation includes an effort to accelerate FDA approval of state programs. Florida became the first state to get such a program approved in 2024, but it has yet to import any medication. States like Colorado are waiting for their own approvals, while Health Canada has warned exporters that selling prescription drugs outside Canada is illegal if it threatens domestic supply.
In addition, Trump has floated the idea of imposing tariffs on imported pharmaceuticals under a national security provision, a move that could further complicate global drug trade. If implemented, these tariffs may raise drug prices in the U.S., especially since many pharmaceutical ingredients are sourced from India and China. However, Law points out that unless Canada imports those ingredients through the U.S., the Canadian market is unlikely to feel the impact.
While Trump’s initiative may reshape how Americans pay for medications, Canada’s pricing system, regulatory safeguards, and limited export volumes are expected to shield the country from most consequences. Still, federal agencies remain on alert, ready to respond if cross-border pharmaceutical policies threaten domestic supply or affordability.
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