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Analysis: Executive Order “Delivering Most-Favored-Nation Prescription Drug Pricing to American…

By May 15, 2025January 5th, 2026No Comments

Analysis: Executive Order “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients”

Image Credit: Getty Images

By Christopher Nial, edited by Richard Hatzfeld, Katie Franklin and Jillian Semaan. This is my personal analysis, with kind input from Richard, Katie and Jillian. Views are my own.

Introduction

President Trump’s Executive Order “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” (signed 12 May 2025) attempts to realign U.S. drug prices with the lowest prices paid by peer nations. It effectively revives the “Most Favored Nation” (MFN) pricing policy idea from Trump’s first term (a 2020 initiative that was blocked and later withdrawn).

Executive Summary

The implications differ substantially across the three primary stakeholders: pharmaceutical companies, payers (including insurers and pharmacy benefit managers), and patients. Below are the best-case and worst-case scenarios for each group.

Pharmaceutical Companies

Best-case Scenario:
Companies negotiate moderate price reductions voluntarily, preserving their autonomy and avoiding drastic regulatory measures. They succeed in nudging other high-income countries towards marginally higher prices, softening the blow to their U.S. revenues. The order’s threats remain largely theoretical as industry compliance satisfies the U.S. government, allowing firms to continue their innovation-driven business models, albeit with slightly narrower margins.

Worst-case Scenario:
Manufacturers resist price concessions, triggering aggressive enforcement actions including mandatory price regulations, expanded drug importation programmes, and antitrust litigation. Profits plunge due to mandatory price alignment with the lowest global markets. Companies may have to withdraw certain medicines from smaller markets, reduce R&D investments significantly, or even relocate operations abroad to mitigate losses, fundamentally destabilising their current business models.

Payers (Insurers and Pharmacy Benefit Managers)

Best-case Scenario:
Payers achieve dramatic cost savings as U.S. drug prices align with substantially lower international levels. Medicare, Medicaid, and private insurers see greatly reduced pharmaceutical expenditures, translating into healthier margins and the possibility of reduced premiums. Pharmacy Benefit Managers (PBMs) adapt their roles to a transparent pricing system, shifting away from rebates towards a simpler, more patient-friendly pricing model, potentially strengthening public perception and market position.

Worst-case Scenario:
The pharmaceutical industry fiercely resists, leading to protracted legal battles and market uncertainty. Drugmakers withdraw or limit the availability of certain high-demand medications in the U.S. market, leaving payers scrambling to source critical therapies. PBMs see their established rebate-driven revenue model collapse without a clear alternative, creating financial instability. Insurers are forced into difficult decisions: raise premiums, reduce coverage, or restrict formularies, triggering negative backlash from consumers and regulators.

Patients

Best-case Scenario:
Patients benefit immensely, quickly experiencing lower prices at pharmacies — up to 80% lower for certain high-cost medications. Access to innovative treatments expands as affordability barriers drop significantly, and direct-to-consumer purchasing or importation options enhance consumer choice. Lower out-of-pocket costs alleviate financial stress, substantially improving public health outcomes and patient satisfaction.

Worst-case Scenario:
Drug companies respond by limiting or withdrawing high-cost medications from the U.S. market, citing unsustainable economics. Patients face reduced availability of vital medicines, particularly newer, cutting-edge therapies. Increased reliance on imported medications introduces logistical complexities, potential safety risks, and uncertainty. Market instability leads to increased out-of-pocket costs for some patients, despite the original intent, exacerbating healthcare disparities and access inequalities.

Detailed Analysis

Below is a detailed analysis of the order. Each paragraph’s intent is explained, followed by critical insight into its implications for pharmaceutical manufacturers, payers (insurers and pharmacy benefit managers), patients, and international markets. We also connect the language to Trump’s earlier drug pricing efforts and expert opinions on whether MFN pricing will truly lower U.S. prices or simply shift costs elsewhere.

Section 1: Purpose

Paragraph 1 (Lines 63–68)

The U.S. funds the bulk of global pharma profits through higher prices.

The order opens by stating that although Americans are under 5% of the world’s population, they generate about 75% of global pharmaceutical profits. This stark statistic highlights the pricing imbalance: drug companies sell cheaply abroad but charge “enormously high prices” in the U.S. to subsidise those discounts. The goal here is to frame the problem — America’s overpayment for drugs — as an “egregious imbalance” orchestrated through a scheme of international price discrimination.

For pharmaceutical manufacturers, this paragraph signals that their strategy of offsetting lower overseas prices with U.S. profits is under scrutiny. The implication is that industry pricing practices are unfair to Americans and ripe for intervention.

For patients and payers, the context lays the blame for high U.S. drug bills on a global pricing strategy that effectively treats Americans as cash cows. By funding most of pharma’s profits, Americans have been subsidising innovation for the world — a point likely to resonate with public frustration over drug costs. The international consequence of this framing is confrontational: it implies foreign governments have benefited from cheaper drugs at Americans’ expense. It sets the stage for a policy that might force price convergence either by lowering U.S. prices or pressuring prices upward elsewhere. (Notably, Trump made similar arguments in his first term, insisting the U.S. should pay no more than the lowest price globally. That 2020 MFN plan stalled, but its rationale is being revived here.)

Paragraph 2 (Lines 69–79)

American patients unwittingly subsidise foreign low prices and R&D.

This paragraph expands on how Americans “turned [their] back on” their own interests while subsidising others. It lists the ways U.S. consumers fund the system: marked-up prices on American buyers, generous public R&D subsidies (through NIH funding) and public insurance spending. Meanwhile, drug firms are accused of acquiescing to low prices demanded by other countries and simultaneously blocking U.S. payers (both public programs and private insurers) from negotiating better deals. The inflated U.S. prices fuel worldwide medical innovation as foreign health systems “get a free ride”. The goal of this paragraph is to underline the inequity: American money drives new cures, but foreign nations enjoy those cures at bargain prices.

For the pharmaceutical industry, this language is a warning — their global pricing model (high U.S. prices, lower in other countries) is deemed exploitative and will no longer be tolerated. The mention of manufacturers fighting against U.S. payers’ negotiating power suggests that pharmacy benefit managers (PBMs) and insurers have been stymied in attempts to bargain down prices, keeping U.S. costs high. This hints that the administration sees industry practices (like preventing Medicare negotiation or maintaining secret rebates) as part of the problem.

Patients are portrayed as unwitting sponsors of both Big Pharma and foreign healthcare systems, implying they deserve relief. Internationally, this paragraph accuses other developed nations of freeloading — using their buying power or price controls to secure cheap drugs, knowing U.S. sales will cover R&D costs. The implication is the U.S. will push back, potentially via trade pressure or demanding other countries pay more. Indeed, experts have noted that a U.S. MFN policy could force higher prices onto other countries or cause companies to withdraw from low-price markets. In Trump’s first-term attempt, similar rhetoric about foreigners “free-riding” was used, reflecting a continued policy of making other wealthy countries pay more so that Americans pay less.

Paragraph 3 (Lines 80–84)

A call to end the inequity — Americans deserve the lowest prices.

Here the order pointedly declares that the “abuse of Americans’ generosity… must end”. It vows that Americans “will no longer be forced to pay almost three times more for the exact same medicines” found elsewhere, often made in the same factories. As the world’s largest purchaser of pharmaceuticals, the U.S. (and its citizens) “should get the best deal”. This paragraph serves as a mission statement: it encapsulates the Executive Order’s intent to equalise drug prices, ensuring U.S. prices drop to at least the lowest level (“most-favored-nation” price).

It underscores fairness — if Americans are the biggest customers, they ought to get prices as low as anyone, not the highest.

For pharma companies, this is a direct threat: either voluntarily give Americans the lowest price you offer globally, or the government will act to force the issue. The mention of identical medicines made in the same plants but sold for triple price in the U.S. creates a powerful image of unfairness, buttressing the policy’s moral claim. Patients stand to gain the most if this promise is fulfilled — it implies drastic cuts (paying one-third of current prices in some cases).

For payers, if Americans truly get the lowest price globally, insurers and government programs could see massive savings; however, it may also undercut PBMs’ rebate-based business model (since prices would be low upfront rather than high with rebates). Internationally, this ultimatum foreshadows consequences: either companies lower U.S. prices or, implicitly, they might raise prices abroad to “level up” the playing field. President Trump himself acknowledged this possibility, suggesting drug prices might increase in other parts of the world to make pricing “fair” relative to the U.S. That raises concern that global prices could rise, which could strain health budgets in other countries and diminish access, especially in lower-income markets. Analysts have warned that if forced to charge low prices in America, firms may respond by hiking prices elsewhere or pulling out of small markets, meaning poorer countries could lose affordable access. This paragraph, while focused on Americans, implicitly sets a new tone for global pharma pricing — one that might export higher costs abroad as the U.S. seeks the “best deal.”

Section 2: Policy

Lines 86–92

Americans must have access to the lowest price; the U.S. will act if manufacturers don’t comply.

Section 2 succinctly states the policy objective: Americans should not subsidise low drug costs in other countries while being overcharged at home, so Americans “must have access” to the “most-favored-nation price” for prescription drugs and biologics. In other words, the U.S. will insist on paying no more than the lowest price charged in any similarly developed nation. The section further declares the administration will take immediate steps to end global freeloading, and if drug companies fail to voluntarily offer U.S. consumers the lowest price, “additional aggressive action” will follow. It is effectively a warning shot formalising the U.S. government’s stance that it is now national policy to pursue price equalisation.

This is alarming for the pharmaceutical industry. It signals that voluntary concessions are expected imminently, or else binding measures (price controls, importation, antitrust actions, etc.) will be imposed. It creates pressure for companies to negotiate and possibly cut prices preemptively to avoid harsher interventions.

If implemented, this policy promises significant relief for patients. Access to medicines at the lowest world price could dramatically reduce out-of-pocket costs, especially for expensive drugs.

Payers (like Medicare, Medicaid, and private insurers) would also benefit from lower reimbursement costs; however, it challenges the traditional role of PBMs/insurers in price negotiation, since the government is asserting a reference benchmark across the market. In fact, the White House indicated this MFN strategy is intended to impact prices across Medicare, Medicaid and commercial markets alike, a broad scope that could reduce the need for back-end rebates and alter payer contracting strategies.

On the international front, this policy statement doubles down on ending “global freeloading,” implying the U.S. may leverage trade negotiations or other tools to make foreign governments contribute more to R&D costs. It aligns with PhRMA’s sentiment that foreign nations should “pay their fair share”. However, if drugmakers comply by raising prices abroad instead of lowering them in the U.S., it could lead to higher drug spending overseas or even diplomatic friction.

The link to Trump’s first term is clear here: it echoes the intent of a September 2020 Executive Order that aimed to tie Medicare drug payments to low international prices. That earlier effort was criticized as a form of price control and met legal obstacles; Trump’s new order reaffirms the philosophy but also foreshadows a more comprehensive, aggressive approach if needed.

Section 3: Addressing Foreign Nations Freeloading on American-Financed Innovation

Lines 94–101

Using trade tools against countries that underpay for drugs.

This section directs the Secretary of Commerce and the U.S. Trade Representative (USTR) to ensure foreign countries are not engaging in unfair practices that force American patients to shoulder a disproportionate share of global R&D costs. Specifically, they are to take all appropriate action against any foreign policy that is “unreasonable or discriminatory” and that results in drug prices being “suppressed… below fair market value” in those countries. In plainer terms, the administration is treating other nations’ price controls or hard bargaining as a trade issue — possibly even a national security concern if it undermines the U.S. pharma industry’s viability. The mechanism hinted here could involve trade negotiations, tariffs, or sanctions under U.S. trade laws (similar language is used in trade disputes). For example, a country that caps drug prices very low might be accused of an unfair trade practice, prompting USTR to seek changes.

The pharmaceutical industry likely welcomes this part — it externalises the solution by pressuring foreign governments to raise their drug prices, rather than solely forcing companies to cut U.S. prices. Industry and PhRMA have long argued that other wealthy nations should pay more so that U.S. patients aren’t carrying the load. If successful, this could increase revenues in those markets or at least remove some of the incentive for companies to charge Americans extra.

However, this is worrying for patients in foreign countries: “ Fair market value” pricing could mean significantly higher drug costs in countries that currently negotiate low prices or use price controls. A potential consequence is that drug prices could rise globally, which might improve equity from an American perspective but strain healthcare systems abroad and reduce affordability for foreign patients.

For U.S. payers and patients, if this trade pressure worked, it might reduce the need for steep cuts in U.S. prices (since global prices would come up closer to U.S. levels, narrowing the gap). But critics point out it’s challenging to get foreign governments to budge — many have fixed healthcare budgets and political mandates to keep drug spending low. One analyst noted scepticism that Europe could significantly increase its drug prices, given their budget constraints and other spending priorities. Additionally, even if Europe or others agreed to pay more, that doesn’t automatically translate to lower U.S. prices unless paired with domestic measures.

In Trump’s first-term MFN attempt, there was less emphasis on using trade tools; this revived version explicitly adds a trade-based strategy. It aligns with Trump’s broader ethos of confronting trading partners — effectively treating drug pricing like other trade disputes (similar to how one might address tariff disparities). This could lead to negotiations where allies are asked to accept higher drug bills as part of “fair” burden-sharing.

In summary, Section 3’s goal is to share the R&D cost load more equally among rich nations. It places initial blame and responsibility on foreign governments (“heavy-handed” negotiators, in Trump’s words), complementing Section 5’s pressure on manufacturers. If neither yields results, Americans would still seek relief through unilateral action, as foreshadowed later in the order.

Section 4: Enabling Direct-to-Consumer Sales at the Most-Favored-Nation Price

Lines 103–107

Facilitating importation or direct sales of drugs at the lowest global prices.

This section instructs the Secretary of Health and Human Services (HHS) to facilitate “direct-to-consumer purchasing programs” for pharmaceutical manufacturers that sell their products to American patients at the MFN price. In essence, the administration is looking to bypass the traditional supply chain (“middlemen” like wholesalers and PBMs) and allow Americans to buy drugs directly at the low international price if manufacturers agree to offer them. The mechanism isn’t spelt out in detail here, but it could involve importation programmes or special direct sales channels. President Trump, in promoting this order, explicitly said he wants to “cut out the middlemen” so that drugs can be sold directly to consumers at the lowest price. This reflects a view that intermediaries (such as PBMs) add costs or impede patients from getting the best price. Potential implementations might include expanding personal drug importation from countries where prices are low or setting up a platform for manufacturers to sell medications at MFN prices to U.S. customers (possibly with government facilitation or certification).

For payers, this is a disruptive idea — if patients can obtain medications at a cheap international price directly, the role of an insurer or PBM in managing that drug purchase diminishes. Insurers might even encourage such direct purchases of expensive drugs to reduce their own costs. PBMs, in particular, could see their rebate-driven business model threatened since their leverage comes from negotiating discounts off high U.S. list prices. If list prices are effectively capped at the lowest international level for those who go through these programmes, rebates and complex formularies could become less relevant. The Goodwin law analysis of the order noted this initiative aims to incentivise direct sales for manufacturers that comply with MFN pricing and that Trump highlighted it as a way to “get rid of the middlemen”. That implies the government might offer regulatory or legal safe harbours for companies selling at MFN price directly to patients.

For pharmaceutical companies, this could be a two-edged sword: on the one hand, a direct-to-consumer channel at MFN prices might help them reach patients and fend off more draconian price controls (and perhaps volume could increase if prices drop). On the other hand, it undermines the pricing power they wield in the U.S. via the traditional system. Many manufacturers are wary of personal importation programs, citing concerns about safety or supply chain integrity — but those concerns might be revisited if the alternative is outright price regulation.

Patients could benefit from lower prices and access to drugs otherwise unaffordable, especially if this allows the importation of drugs from, say, Canada or Europe at a fraction of the U.S. cost. However, the practicality is uncertain: Will drug makers willingly participate, and how will such sales be organised? Also, if only some companies cooperate, this could steer patients toward those products, affecting market competition. Internationally, a direct purchasing program might effectively mean legalising large-scale importation from low-price countries.

This could ire those countries if it starts affecting their supply or if manufacturers threaten to restrict supply to keep their own prices low locally. Indeed, the order’s later provisions about importation (Section 5(b)(ii)) and export restrictions (Section 5(b)(iv)) tie into this — suggesting a complex balancing act. In summary, Section 4 aims to give Americans a shortcut to low prices by leveraging global price disparities directly, which could significantly shake up U.S. pharmacy distribution and pressure domestic prices downward. It’s a novel move that underscores the administration’s willingness to bypass conventional systems to achieve price parity.

Section 5: Establishing Most-Favored-Nation Pricing

Section 5 is the heart of the Executive Order, laying out the concrete steps and escalations to achieve MFN pricing. It has two main parts: (a) an initial 30-day action and (b) a set of follow-up measures (six sub-paragraphs, (i)–(vi)) if insufficient progress is made. Each piece is analysed below:

Paragraph (a) (Lines 109–115)

30-day deadline for HHS to set price targets.

This instructs HHS, within 30 days, to, in coordination with the White House Domestic Policy Advisor and the CMS Administrator, “communicate most-favored-nation price targets” to pharmaceutical manufacturers. The aim is to swiftly kick-start negotiations by telling drug companies what price point the U.S. expects — specifically, a price in line with what “comparably developed nations” pay. Essentially, HHS will identify the lowest international prices for certain drugs (likely focusing on expensive drugs with big price disparities) and present those as the target for U.S. pricing. This approach mirrors the failed late-2020 Medicare demonstration project but extends beyond Medicare. The scope is notable: the order doesn’t explicitly limit this to Medicare or federal programmes, implying it may cover all American patients or at least serve as a benchmark broadly. White House officials indeed indicated the plan would affect Medicare, Medicaid, and private markets alike.

For pharma companies, the 30-day timeline may be extremely aggressive. In effect, they are given one month to come to the table and offer price reductions or plans to meet these international reference prices. This creates immediate pressure on their pricing strategy and could send shockwaves through their stock prices and investor expectations (notably, on the announcement, some pharma stocks rose, perhaps betting the plan might be watered down or delayed).

Payers — particularly government payers — will be involved in identifying which drugs and what target prices are communicated. CMS will likely focus on high-cost drugs where U.S. Medicare/Medicaid spending is highest and where foreign prices are much lower (an official’s mention of GLP-1 drugs suggests drugs like insulin or newer diabetes/obesity medications might be prime candidates). This mechanism is a shot across the bow: it’s not binding yet, but it clearly signals to manufacturers the expected endgame.

For patients, if companies comply, it could mean certain drugs see price cuts off, as Trump touted, 30–80% reductions. However, if companies resist, patients might not see immediate benefits — the 30-day targets are a negotiation step. The inclusion of the Domestic Policy advisor in coordination shows the White House is closely driving this, not leaving it solely to health agencies. Comparably developed nations likely refer to OECD countries or those with similar GDP per capita — meaning the reference points are prices in Europe, Canada, Japan, etc., not the poorest countries (so this isn’t referencing, say, Indian or African generic prices, but rather Western benchmarks). This ensures the targets are seen as “fair” relative to peer economies, yet those are still often much lower than U.S. prices.

An important nuance: some countries negotiate hard but also limit access (e.g. some expensive drugs might not be covered at all if the price is too high). The order doesn’t detail whether the target price is simply the lowest price abroad or something more nuanced. Likely, it will use existing international reference pricing models as a guide. In Trump’s earlier MFN model for Medicare Part B, the plan was to pay the lowest price among a set of rich countries, which is similar in spirit here.

Paragraph (b)

Conditional enforcement steps if price targets aren’t met.

This paragraph states: if after the action in (a) there is not “significant progress” toward MFN pricing for Americans, then a series of further measures will be taken, “to the extent consistent with law.”. The phrase “significant progress” is deliberately vague — giving the administration leeway to decide if industry concessions are sufficient or not. If not satisfied, the order triggers a multi-faceted plan (sub-paragraphs (i) through (vi)), which escalates pressure on both manufacturers and possibly other actors. The qualifier “consistent with law” is important, as several of these steps could push against existing legal boundaries or require new rulemaking. This suite of measures is essentially the enforcement mechanism behind the MFN policy, and each is analysed below:

  • (i) Rulemaking to impose MFN pricing: HHS is directed to propose a regulation to enforce MFN pricing if voluntary progress falls short. This implies formalising the price caps — for instance, through a CMS rule that sets Medicare reimbursement at the lowest international price, or even a broader regulation affecting all sales (though the latter would be unprecedented and likely require legislation). In Trump’s first term, a rule to tie Medicare Part B drug payments to international prices was issued (in November 2020) but swiftly blocked in court for procedural reasons. This new directive shows the administration is willing to attempt rulemaking again, presumably more carefully to survive legal challenges. The Goodwin analysis notes any such plan “would be subject to significant legal challenges” and unclear in scope — for example, whether it would target Medicare Part B (doctor-administered drugs, as before), Part D (pharmacy drugs, where private plans negotiate), Medicaid (which already gets rebates and best-price guarantees), or even commercial insurance. If HHS goes down this path, pharma companies face a potential government-imposed price control — effectively a cap at the foreign lowest price. This would be a severe outcome for industry profits in the U.S., which is why they would be highly motivated to offer concessions before this rule becomes a reality. Payers would likely welcome such a rule for Medicare as it could sharply reduce spending, but private insurers might be wary of how it affects their negotiations (for Part D, private plans fear that strict price controls could, for instance, lead to higher premiums or reduced drug choice as was argued back in 2018). Patients would benefit from the lower prices if the rule takes effect, though if companies respond by withdrawing drugs from the U.S. market (a drastic but not impossible response to price controls), it could limit access to some therapies. The mention that this step will be proposed suggests a process — meaning even after 30 days, if triggered, it could take months or years to finalise, giving time for political and legal pushback. This sub-paragraph is essentially the “stick” to compel compliance: the credible threat of regulation.
  • (ii) Facilitating drug importation if needed: HHS is told to consider certifying to Congress that the importation of drugs meets the safety and cost requirements of federal law (Section 804 of the FDCA). By law, importation of prescription drugs from abroad (outside manufacturer-controlled channels) can be allowed if the HHS Secretary certifies it poses no additional risk to safety and will significantly reduce costs. No Secretary had ever given that certification until now it’s being actively considered as a tool. If the Secretary does certify, the FDA Commissioner must then outline how it will grant waivers for importation on a routine basis from countries with low drug costs. In simpler terms, this measure paves the way for Americans (or pharmacies/wholesalers) to import cheaper drugs from countries like Canada or Europe under a regulated framework. The executive order essentially threatens that if pharma companies don’t voluntarily lower prices, the U.S. government will open the floodgates to parallel imports of cheaper meds. This is a major concern for the pharmaceutical industry: it undercuts their control of supply and pricing. Drugmakers have historically lobbied hard against broad importation, citing safety and the need to maintain pricing differentials. Here, the administration is saying it will use existing law (which has been on the books for decades) to let the market arbitrage price differences. For patients and payers, this could be a huge win in terms of immediate access to cheaper drugs — for instance, many brand-name drugs cost far less just across the Canadian border. Importation could be used by individuals or entities like state programmes and even hospitals to source cheaper supplies. However, implementation challenges are significant: ensuring imported drugs are authentic and safe, setting up a regulatory system to manage this, and handling likely resistance (for example, some drug manufacturers might limit supply to countries that export to the U.S. to prevent arbitrage). The order acknowledges these hurdles by requiring certification of safety. It’s worth noting that the Trump administration, in its first term, flirted with drug importation pilot programs (some states like Florida were interested), but HHS never gave the full certification. Including it here ups the ante. If enacted, this could also impact PBMs and pharmacies — patients might bypass local pharmacies for international mail-order, or domestic pharmacies might themselves import stock. Internationally, this could upset Canada and other countries that might suddenly find U.S. demand spilling over. Canada has in the past expressed concern that large-scale U.S. importation could cause drug shortages in Canada. So, while this measure is a powerful bargaining chip, it could have complex repercussions in cross-border drug supply. The presence of this clause is a clear sign that lowering U.S. prices by any means — even leveraging foreign supply — is on the table if manufacturers don’t cooperate.
  • (iii) Antitrust enforcement on anti-competitive practices: This calls for the Attorney General and the Chairman of the FTC to, following a report from a prior April 15, 2025 order (which likely investigated drug pricing practices), “undertake enforcement action” against any anti-competitive practices identified, using laws like the Sherman Act and FTC Act. Essentially, if drug companies are engaging in collusion, pay-for-delay agreements (to stall generics), or other monopoly-maintaining tactics that keep prices high, the administration will prosecute them. This complements the pricing policy by attacking another facet of high drug costs: competition problems.
  • For pharmaceutical companies, it’s a warning that beyond pricing itself, their market behaviour is under the microscope. Deals that delay generic drugs or biosimilars, patent abuse (e.g. patent thickets to block competition), or manipulating regulatory processes could land them in court. In fact, the FierceHealthcare summary notes DOJ/FTC would address patent practices, pay-for-delay, and even misleading patent listings (Orange Book issues) as part of this push. This means the government is not just passively waiting for prices to drop; it’s actively looking to break any barriers to cheaper alternatives.
  • For payers and patients, robust antitrust action could mean faster introduction of generics and biosimilars, which naturally lowers prices. It also indirectly serves the MFN goal: if U.S. markets become more competitive, prices will move toward (or below) those international levels on their own. This step ties back to Trump’s first term as well — there was an increased focus on drug competition (for instance, encouraging biosimilars and trying to end pay-for-delay).
  • What’s new is linking it to the MFN context explicitly. Internationally, this measure doesn’t directly involve other countries, except that many anti-competitive behaviours (like global patent settlements) often have international scope. The mention of the April 15, 2025, Executive Order (“Lowering Drug Prices by Once Again Putting Americans First”) suggests that the order investigated these issues (Section 13 of that EO produced a report on anti-competitive practices). Now, with MFN pricing on the line, the administration is poised to act on that information. In summary, sub-paragraph (iii) is about using the stick of law enforcement: if companies don’t lower prices because they’re exploiting monopolies, the government will bust those monopolies where possible. It’s an important complement — recognising that simply referencing foreign prices won’t help if a drug has no competition and the company can game the system.
  • (iv) Review of export practices fueling price discrimination: Here, the Secretary of Commerce (and other relevant agency heads) must consider actions regarding the export of pharmaceutical drugs or precursor materials that may be fueling global price discrimination. This is a less obvious clause. It appears to target the flow of pharmaceuticals or key ingredients out of the U.S. that might enable other countries to enjoy lower prices. One interpretation is that it contemplates export controls or other trade measures to prevent U.S.-developed or U.S.-manufactured drugs from being sold cheaply overseas unless Americans get the same deal. For example, if a drug is made in the U.S. and shipped abroad at a low price, Commerce might restrict that export unless the price is equalised. It could also refer to restricting the export of precursors (like active pharmaceutical ingredients) to countries that impose low prices, as leverage. Essentially, it’s another pressure point on foreign “freeloading”: if Country X insists on very low prices that the U.S. deems unfair, the U.S. might limit their access to the drug or its ingredients from U.S. sources.
  • For pharma companies, this is tricky — it suggests the U.S. government could interfere in their global supply chains in the name of price fairness. It’s somewhat akin to how some countries ban exporting certain medicines if they face domestic shortages. Here, the concern is not shortage but price disparity. If enforced, a company might have to choose: charge more equitable prices abroad or risk export restrictions. This could, in theory, force foreign prices up (or drive manufacturing wholly offshore to avoid U.S. export jurisdiction).
  • For patients abroad, such actions could reduce the availability of drugs in their country (e.g., if exports are cut off or a company refuses to sell under the new constraints).
  • For American patients, this is another lever to push global prices closer to U.S. levels, theoretically easing the path to MFN parity.
  • However, it is a fairly confrontational tool and might be hard to implement without damaging diplomatic and trade relations, underscoring how the order is not shy about drastic measures: it treats drug pricing disparities almost like a national trade emergency.
  • This provision hadn’t been prominently discussed in Trump’s first term; it’s a novel inclusion that shows how far the administration is willing to go to combat “global price discrimination.” In practice, using this could involve Commerce investigating if cheap exports undercut U.S. industry, perhaps framing it as an unfair trade subsidy. It aligns with Section 3’s philosophy but moves from investigation to potentially choking off supply.
  • This doesn’t directly affect payers’ strategies except insofar as it is part of forcing the hand of foreign governments and companies.
  • (v) FDA review of drug approvals (safety/marketing scrutiny): The FDA Commissioner is directed to review and possibly “modify or revoke approvals” for drugs that “may be unsafe, ineffective, or improperly marketed”. On its face, this is about ensuring drug safety and efficacy — the FDA’s normal remit. But the inclusion here, in the context of MFN enforcement, is intriguing. It could be interpreted as an indirect threat: if companies are not cooperating on fair pricing, the administration might have the FDA take a harder look at their products. “Improperly marketed” could refer to violations like misleading advertising or promotion of drugs for unapproved uses. Normally, those issues are handled by warnings and fines, not withdrawing approval. So this clause might be less about pricing and more about flexing regulatory muscle in general. It tells pharma manufacturers that all aspects of their conduct, even beyond pricing, are under review. For instance, a company that refuses to lower a price could find its blockbuster drug’s aggressive marketing practices suddenly re-examined by regulators. In extreme cases, if a drug’s approval was predicated on certain post-market studies or conditions, and the company is found in non-compliance, the FDA could threaten to pull it from the market. That would, of course, be a drastic measure, likely only used if a drug is genuinely unsafe or if the standoff escalated.
  • Pharmaceutical companies would view this as sabre-rattling — it’s unusual to tie drug approval status to pricing battles, so it may be more a signal of “we will scrutinise everything you do”. The Goodwin commentary also noted it’s unclear whether the FDA is meant to target drugs not meeting MFN targets via this clause, given FDA’s mandate is safety/efficacy, not pricing.
  • Patients could be affected if the FDA actually pulled drugs from the market — something no one wants if the drug is effective — so presumably this would only be for genuine safety or fraud issues, not simply to punish high prices.
  • For payers, this provision has little direct effect except that it contributes to pressure on companies to play ball. It’s another piece of the aggressive posture: combine legal, trade, and regulatory pressures to corral the industry into lowering prices. In the broader picture, it complements (iii) on antitrust and (ii) on importation: together, they threaten a company’s market exclusivity, market access, and regulatory approvals — a full-court press.
  • (vi) All agencies to act to address freeloading and price discrimination: This final subparagraph is a catch-all: it orders all relevant agency heads, coordinating with the Domestic Policy Advisor, to “take all action available” to address global freeloading and price discrimination against American patients. It’s a broad mandate for the government to use every tool in its toolbox. In practice, this could mean continued efforts like diplomatic pressure, public shaming of companies or countries, leveraging international forums (e.g. the G7/G20 health discussions) to push for pricing fairness, and implementing the earlier points (trade measures, importation, etc.). It ensures that even beyond the explicit items (i)–(v), the administration will pursue the MFN goal relentlessly.
  • For pharmaceutical companies, this signals that no avenue is off-limits: from legislation (if possible) to regulation to litigation, the U.S. will seek to break the status quo of the U.S. paying the most.
  • For payers and patients, it is a reassurance that the government intends a whole-of-government approach to lower drug costs, not a one-off tweak. It also suggests coordination — for example, HHS might work with the Department of Veterans Affairs or Department of Defense (huge drug purchasers) to ensure even those outside Medicare are pushing for the lowest prices. Or the State Department could get involved if diplomatic negotiation is needed. This mirrors the multi-pronged strategy hinted at in the press conference where Trump officials described it as “multipronged” with trade, justice, and HHS all playing roles. In essence, (vi) is the umbrella instructing the government to act in concert. It is also a legal boilerplate to show the President directing his subordinates to do everything they lawfully can.
  • The link to the revived policy from the first term: previously, the efforts were more siloed (a CMS demo here, an importation rule there, etc.). Now, having learned from past failures, this order explicitly involves multiple agencies to create pressure from all sides. This holistic push is intended to overcome the myriad challenges that sank the 2020 MFN attempt.

In summary, Section 5 sets up an ultimatum and action plan: immediate price target talks, and if those don’t yield “significant” cuts, the U.S. will move to enforce MFN pricing via new rules, facilitate drug imports, crack down on anti-competitive behaviour, pressure foreign markets, and use any regulatory levers available. It’s an ambitious and aggressive scheme. Sceptics argue whether it will work. Some experts believe drug companies might game the system — for example, by using confidential rebates abroad to hide true low prices, thereby evading MFN referencing. If that happens, U.S. prices might not fall as expected. Others fear companies, when cornered by these policies, would rather abandon smaller markets (thus eliminating those low reference prices) than slash U.S. prices, which could leave U.S. prices high and poorer countries worse off. The administration is betting that the threat of all these combined measures will be so unpalatable that both manufacturers and foreign governments will yield — lowering U.S. prices and perhaps raising some foreign ones, meeting somewhere in the middle. The outcome will depend on complex negotiation and the resolve of each party to test these threats.

Section 6: General Provisions

Lines 148–160

Standard legal and budgetary disclaimers.

The final section contains the usual boilerplate found in Executive Orders. It states that nothing in the order shall impair the existing legal authority of any agency or the OMB’s budget functions. It also clarifies that the order must be implemented consistent with applicable law and subject to availability of appropriations — an acknowledgement that some measures might require funding or could be limited by law (for example, HHS can’t spend money on new programs without Congress providing for it). It further notes that the order creates no enforceable legal rights for any party. This means, for instance, a patient or a company can’t sue the government if the order’s promises (like access to MFN prices) aren’t fulfilled — it’s not legally binding on outside parties, only guiding executive policy. There’s also a directive that HHS shall arrange funding to publish the order in the Federal Register, which is a formality. In terms of implications, this section doesn’t drive policy changes; it’s about ensuring the order is interpreted correctly and lawfully executed. It reminds us that while an EO can direct agencies, it cannot itself change statutes — thus, all aggressive actions envisioned (like importation waivers or new rules) must be done within the bounds of existing laws or through new rulemaking processes. If laws are insufficient, Congress would need to act (though in this scenario, Congress had not passed MFN legislation, having even declined to include it in a prior bill, according to one commentator).

For patients and payers, Section 6 simply means that the order’s lofty guarantees are not immediate rights — they depend on how agencies implement them.

For pharma manufacturers, it’s a reminder that while the President can shake his fist, the agencies still must follow legal procedure (which gives the industry opportunities to lobby, comment, or litigate at each step). In the context of Trump’s revived MFN policy, this section is identical to the fine print in most EOs and doesn’t contain surprises. It does, however, reinforce why some are sceptical about the order’s ultimate effect: many of its bold moves could be tied up in courts or bureaucracy. A fund manager quoted about the order noted the lack of detail and expressed doubt that “this will ever happen” in full, precisely because similar ideas hit legal roadblocks in the past. Section 6 essentially anticipates those challenges by couching the order as subject to law.

Conclusion

The “Most-Favored-Nation” Executive Order represents a sweeping and hard-line approach to lowering U.S. drug prices by leveraging international price comparisons. Each paragraph articulates a piece of a strategy that is as much about international dynamics as domestic policy — blaming foreign underpayment and aiming to correct it while also arming U.S. agencies with an array of sticks to compel cooperation. If fully implemented, American patients could see substantially lower drug costs, finally paying what consumers in Canada or Europe pay.

However, the policy could also prompt pharmaceutical companies to raise prices abroad or withdraw from low-paying markets, potentially raising global drug prices or diminishing access in lower-income countries — an outcome even the White House acknowledges by contemplating export restrictions and importation to counter any evasive moves.

Payers in the U.S. would need to adapt: insurers might see reduced drug spend, but PBMs could lose relevance if direct pricing and importation take hold. In Trump’s first term, a narrower MFN proposal for Medicare was struck down and labelled unworkable; this 2025 incarnation is more comprehensive, essentially resurrecting and expanding the idea with added international and enforcement dimensions.

Whether it will truly lower U.S. prices without unintended fallout remains hotly debated. Critics argue the plan is easily gamed and cannot defy global market economics, warning that, if mishandled, it might leave U.S. prices high while reducing pharmaceutical innovation and access elsewhere — a scenario in which “everyone loses,” as one op-ed put it. On the other hand, supporters contend it’s past time to stop America from “footing the bill” for everyone else, and this bold strategy might finally force a rebalance.

The Executive Order thus sits at the intersection of trade policy, healthcare affordability, and industry regulation — a bold experiment to fix a long-recognised inequity in drug pricing, with outcomes that will be closely watched and vigorously contested. The true test will come in the implementation: negotiations in the next 30 days and the global responses that follow will determine if American patients indeed get the promised “best deal” without adverse side effects or if this policy proves too contentious to fully realise.

Sources:

Christopher Nial is a Senior Partner at FINN Partners in the Global Health Impact group.

Analysis: Executive Order “Delivering Most-Favored-Nation Prescription Drug Pricing to American… was originally published in BeingWell on Medium, where people are continuing the conversation by highlighting and responding to this story.

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