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New Report Suggests White House Negotiating for Higher Drug Prices Internationally

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Key Takeaways

  • Pharmaceutical companies are negotiating with the Trump administration to comply with the MFN order, which aims to lower US drug prices.
  • The administration is considering raising international drug prices while lowering domestic prices to satisfy the MFN requirement.
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The talks are a result of the MFN order, which seeks to make US drug prices match lower prices in international markets.

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A new report says that the White House is negotiating with pharma companies to increase prices in certain foreign markets.
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There’s more than one way to satisfy the most-favored-nation (MFN) order.

Major pharmaceutical companies are in the process of negotiating domestic pricing strategies with President Trump’s administration. Earlier this year, the President issued an executive order stating that pharmaceutical companies must treat the United States as a MFN when pricing their drugs, meaning that US drug prices would be as-low-as or lower than the lowest cost across the world.

Making the US a most-favored-nation

Last week, the President reaffirmed his stance on this policy by publishing letters to 17 major pharmaceutical companies demanding that they fulfill the requirements of the order. According to the letters, the companies had suggested alternative means of addressing the issue of domestic drug prices. However, the president dismissed these suggestions and claimed that they were “shifting blame and requesting policy changes that would result in billions of dollars in handouts to the industry.”

The letters stated that these companies would have 60 days to fulfill the requirements of the order.

While the goal of the order appears to a reduction in domestic drug prices, a new report suggests that the companies and administration are considering another option to meet the MFN requirement. According to Reuters,1 the administration has discussed plans with the drug makers to increase prices abroad in order to satisfy the order.

The reporting suggests that the plans include both lowering prices domestically while raising them in international markets to make up the difference. Pharma companies have long argued that drug pricing in the US makes the territory friendly to innovation and that lowering prices in the region would reduce their ability to test and research new treatments.

The Reuters report also states that when asked for a comment on international drug pricing negotiations, the White House referred the news outlet to a section of the original MFN order that says that says trade officials would take action against countries or territories that keep drug prices below fair market value.

It's unclear exactly how this would work, as Reuters’ report continues to explain that drug prices in many European markets are negotiated directly with government bodies. In the US, prices are largely determined by the market, which plays a role in the higher prices that Americans face at the pharmacy. In order to raise prices in other regions, pharma companies would theoretically have to renegotiate deals with these foreign governments, who in turn would likely not respond well to the idea of their residents paying more for medication, even if doing so would benefit the United States.

Uncertainty remains around tariff talks

These negotiations are occurring alongside the ongoing tariff situation in the United States. President Trump is in the process of negotiating trade deals with a large number of the US’ trading partners which often include increased tariffs on imported goods. The President has stated a variety of reasons for doing so, but his main goal appears to be to increase American manufacturing across all industries, pharma included.

The pharma industry has faced unique challenges in the tariff talks. Pharmaceuticals have sometimes been excused from certain tariffs, but the President has specifically stated plans to place specific tariffs on pharmaceutical goods.

Most recently, he stated that he planned on implementing smaller tariffs on pharmaceuticals in the near-term, which would then potentially raise to 250% within a year to a year-and-a-half.

Obviously, tariffs of that magnitude would make it difficult for pharma companies to reduce prices in the United States, especially if the time frame is only a year-and-a-half. However, it’s important to note that the President has often set strict deadlines for negotiations, only to eventually push the deadlines further back. At this point, it’s still unclear how the MFN order and tariff policies will play out and what impact they will have on domestic drug prices and manufacturing.

Source

Focus: Trump, pharma industry discuss boosting medicine spending abroad to cut US prices, sources say. Reuters. August 7, 2025. https://www.reuters.com/business/healthcare-pharmaceuticals/trump-pharma-industry-discuss-boosting-medicine-spending-abroad-cut-us-prices-2025-08-07/

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