CVS Health Corporation ( CVS ) and The Cigna Group ( CI ) shares trading lower Tuesday. President Donald Trump on Monday signed an executive order aimed at reducing the cost of prescription drugs.

What To Know: According to the Wall Street Journal, the executive order directs Health Secretary Robert F. Kennedy to coordinate with pharmaceutical companies over the next month to lower drug prices. It also directs both the U.S. Trade Representative and the Commerce Department to take steps to combat unreasonable and discriminatory policies in foreign countries.

The order essentially aims to tie U.S. drug prices to those paid by other countries, many of which pay less due to government-negotiated rates. Trump said the order equalizes costs, arguing that Americans have been subsidizing cheaper prices abroad.

It also allows for Kennedy to impose rules and restrictions on drug companies and imports, if the companies don’t lower prices within 180 days.

The order doesn't clarify whether the pricing changes would affect Medicare or Medicaid.

CVS owns CVS Caremark and Cigna ( CI ) owns Express Scripts, both of which operate as pharmacy benefit managers (PBM). Investors may be reacting to the executive order's potential to undercut PBM revenues by tying U.S. drug prices to international rates rather than prices negotiated by PBMs.

CVS and Cigna ( CI ) may also be under pressure after UnitedHealth suspended its guidance, as investors consider whether the same factors could impact the broader industry.

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Price Action: At the time of writing, CVS shares are trading 4.83% lower at $61.73 and Cigna ( CI ) shares are trading 2.68% lower at $307.29, according to data from Benzinga Pro.

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