Pangaea Express: Executive Order Regarding US Drug Prices

President Trump’s latest Executive Order is to bring most-favored-nation prescription drug pricing to the US. Stated in writing by the President, “The inflated prices in the United States fuel global innovation while foreign health systems get a free ride.” Within 30 days of this order, the most-favored nation (MFN) price targets will be communicated to pharmaceutical manufacturers.

If companies do not make “significant progress towards most-favored-nation pricing for American patients” further action will be taken to lower prices such as:

• A rulemaking plan will be imposed for MFN
• Drugs will be imported from developed nations – The Commissioner of the FDA will describe circumstances where waivers will be consistently granted to import drugs on case-by-case basis. A previous Executive Order issued April 15, to lower drug costs, called out changes to the Section 804 to “improve” the importation of drugs form other countries, including of course, Canada. This could include changes to try to make it easier for US states to find foreign sellers
• Federal Trade Commission will take action against any anti-competitive practices
• Export restrictions on drugs or precursor materials would be implemented
• Ability of FDA to potentially modify or revoke approvals granted for drugs if deemed unsafe, ineffective or improperly marketed

This measure will likely face legal challenges from pharma, insurers and PBMs. As explained by Fiercepharma, executive orders don’t override federal law.

The implementation details of this order remain vague. It is unclear whether the Secretary of Health and Human Services— even with the support of executive departments and agencies—can realistically identify Most Favored Nation (MFN) price targets across the board within just 30 days. This order also comes at a time when the pharmaceutical industry faces mounting pressures, including deep budget cuts to the FDA, which have already begun to affect the agency’s operational capacity.^[1] Additionally, the possibility of broad tariffs on prescription drugs looms. Public input to the Section 232 investigation—which examined U.S. demand for pharmaceuticals and pharmaceutical ingredients, the reliance on foreign supply chains, and the potential impact of tariffs—closed on May 7, 2025.

For more information, please contact Kristen Knott at kknott@pangaea-consultants.com or Marla Weingarten at mweingarten@pangaea-consultants.com.