White House Unveils Pharma Most-Favored-Nation Executive Order

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President Trump issued an executive order targeting pharmaceutical drug prices.

The order, Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients, targets drug prices in the United States in relation to other countries around the world. As the name would suggest, the goal of the order is to pressure pharma companies to provide Americans with pharmaceuticals at prices better-than-or-equal to other countries around the world.

According to the order, pharmaceutical companies have been charging higher prices in the United States in order to fund innovation that benefits the entire world.

The order states, “The United States has less than five percent of the world’s population and yet funds around three quarters of global pharmaceutical profits. This egregious imbalance is orchestrated through a purposeful scheme in which drug manufacturers deeply discount their products to access foreign markets, and subsidize that decrease through enormously high prices in the United States.”

It continues, “The United States has for too long turned its back on Americans, who unwittingly sponsor both drug manufacturers and other countries. These entities today rely on price markups on American consumers, generous public subsidies for research and development primarily through the National Institutes of Health, and robust public financing of prescription drug consumption through Federal and State healthcare programs. Drug manufacturers, rather than seeking to equalize evident price discrimination, agree to other countries’ demands for low prices, and simultaneously fight against the ability for public and private payers in the United States to negotiate the best prices for patients. The inflated prices in the United States fuel global innovation while foreign health systems get a free ride.”

The Secretary of Commerce will evaluate whether any pharma drug pricing policies across the world represent a threat to the American people. The Secretary of Health and Human Services will also take steps to facilitate DTC purchasing programs for pharma companies to sell medications at most-favored-nation prices.

"Within 30 days of the date of this order, the Secretary shall, in coordination with the Assistant to the President for Domestic Policy, the Administrator for the Centers for Medicare and Medicaid Services, and other relevant executive department and agency (agency) officials, communicate most-favored-nation price targets to pharmaceutical manufacturers to bring prices for American patients in line with comparably developed nations," the order states.

There are also potential penalties for companies that are unable to provide most-favored-nation pricing, which includes potential tariff implications and potential action by FDA to revoke approvals.

President Trump first announced this plan on Sunday night. In a post on Truth Social, he stated that the executive order would reduce drug prices by 30-80%. That post also includes language that suggests that President Trump expects drug prices to increase in other countries as a result of this order.

It’s also unclear how this order will impact the President’s plans to place tariffs on the pharmaceutical industry. He has previously stated that tariffs would be placed on the industry, but no official statements have been regarding this policy yet.

Sources

1. Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients. The White House. May 12, 2025. https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients/