The United States has announced a new policy initiative aimed at addressing the high cost of prescription drugs for American patients. President Donald J. Trump signed an executive order on May 12, 2025, to establish "most-favored-nation" pricing for pharmaceuticals in the U.S., aiming to bring domestic prices in line with those of comparably developed nations.
According to the order, the current system allows drug manufacturers to offer discounts to foreign markets while charging higher prices domestically. The executive order states: "Americans should not be forced to subsidize low-cost prescription drugs and biologics in other developed countries."
To address this issue, the administration plans several measures. The Secretary of Commerce and the United States Trade Representative are tasked with ensuring that foreign nations do not engage in practices that force American patients to disproportionately fund global pharmaceutical research and development.
Additionally, the Secretary of Health and Human Services is directed to facilitate direct-to-consumer purchasing programs at most-favored-nation prices. Within 30 days, price targets will be communicated to pharmaceutical manufacturers. Should these efforts fail, further actions may include rulemaking plans for imposing such pricing and considering drug importation under section 804(j) of the Federal Food, Drug, and Cosmetic Act.
The order also calls for enforcement against anti-competitive practices identified by a report issued under Executive Order 14273 of April 15, 2025. Other measures include reviewing export policies for pharmaceuticals and potentially revoking approvals for certain drugs deemed unsafe or improperly marketed.
This initiative represents a significant move towards reducing drug costs for Americans who have been paying nearly three times more than patients in other developed countries. The administration aims to end what it describes as "global freeloading" on American-financed innovation.
