On May 12, President Trump signed an executive order (EO) on "Delivering Most-Favored-Nation (MFN) Prescription Drug Pricing to American Patients." The EO contains several directives aimed at ensuring the US gets the best price for prescription drugs, including: directing the US Trade Representative and Secretary of Commerce to take action to ensure foreign countries are not engaged in practices that drive price hikes in the US; facilitating direct-to-consumer purchasing at the MFN price; and instructing the Health and Human Services (HHS) Secretary to communicate MFN price targets to pharmaceutical manufacturers and undertaking actions if MFN pricing is not delivered. Such actions include proposing rules that impose MFN pricing, enabling drug importation from low-cost countries, and other actions including potentially revoking drug approvals and enforcement against anti-competitive practices. The EO and proposed activities are broader than those pursued by President Trump in his first term, and according to the fact sheet would expand efforts beyond Medicare to include Medicaid, in addition to instructing agencies other than HHS to act. The President proclaimed on Truth Social that the actions in the EO could cut drug prices "almost immediately, by 30% to 80%."

In a signing event at the White House, President Trump said, "the US will no longer tolerate 'profiteering' by drug companies," and will "cut out the 'middleman' in drug pricing." Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Mehmet Oz also spoke, showing a chart outlining negotiated prices under the Inflation Reduction Act (IRA) and noting how much higher these rates are than the MFN price.

The EO states that, "Americans should not be forced to subsidize low-cost prescription drugs and biologics in other developed countries, and face overcharges for the same products in the United States. Americans must therefore have access to the most-favored-nation price for these products. My Administration will take immediate steps to end global freeloading and, should drug manufacturers fail to offer American consumers the most-favored-nation lowest price, my Administration will take additional aggressive action."

See here for the full EO text and here for a fact sheet.

Additional information is also available in the attached WCEY Alert.