President Trump Announces Most-Favored-Nation Policy for Pharma Prices

President Donald Trump

On Sunday, President Trump posted to Truth Social that he planned on implementing a most-favored-nation policy for pharmaceutical drug prices.

On the social media site, President Trump wrote, “For many years the World has wondered why Prescription Drugs and Pharmaceuticals in the United States States of America were so much higher in price than they were in any other nation, sometimes being to ten more expensive than the same drug, manufactured in the exact same laboratory or plant, by the same company?”

(Please note that the President’s post has been edited to remove capitalized words. The rest of the text remains as originally written.)

He continued, “It was always difficult to explain and very embarrassing because, in fact, there was no correct or rightful answer. The Pharmaceutical/Drug Companies would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the ‘suckers’ of America, alone. Campaign Contributions can do wonders, but not with me, and not with the Republican Party.”

A most-favored-nation clause states that a certain party is given treatment equal to or better than any other party.

Trump continued, stating that he plans on signing an executive order on Monday morning (May 12) at 9 am Est that reduces pharmaceutical drug prices. According to his post, the order will impact drug prices by 30-80%.

It’s unclear how broadly Trump plans to extend the impact of the executive order. The government is set to negotiate Medicare prices, but the wording of Trump’s post does not make this specification. Additionally, Trump also states that drug prices may increase in other parts of the world to make them “fair” with American prices.

Technically, pharma companies could simply increase prices in other nations in order to honor a most-favored-nation clause with the United States. However, this would go against Trump’s pledge to reduce the cost for Americans.

It’s unclear if this is a move that the President can enforce via executive order. However, the Republican controlled House and Senate have generally supported President Trump’s efforts.

The President’s Truth Social post concludes, “I will be instituting a most-favored-nation’s policy whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the world. Our Country will finally be treated fairly, and our citizens Healthcare Costs will be reduced by numbers never even thought of before. Additionally, on top of everything else, the United States will save trillions of dollars.”

President Trump has also said that he plans to institute tariffs on pharmaceuticals by mid-May.² It’s unclear how this latest announcement will impact the tariffs. Tariffs would likely impact the prices of pharmaceuticals. However, if pharma companies are forced to reduce prices in the United States, it’s unclear how they would be able to keep prices low in the face of tariffs.

Sources

1. Trump, Donald. Truth Social Post. Truth Social. May 11, 2025. https://truthsocial.com/@realDonaldTrump/posts/114491534347862682
2. Charter, David. Trump to announce pharmaceutical tariffs ‘in next two weeks.’ The Times. May 6, 2025. https://www.thetimes.com/us/news-today/article/trump-announce-pharmaceutical-tariffs-two-weeks-7fxlr2r58