WASHINGTON, D.C. — The U.S. Department of Health and Human Services (HHS) has announced plans to enforce President Donald J. Trump’s Executive Order on Most-Favored-Nation (MFN) Prescription Drug Pricing. This initiative, unveiled on May 20, 2025, is designed to lower healthcare costs by aligning U.S. drug prices with those paid in economically comparable countries.
The order mandates pharmaceutical manufacturers to match U.S. drug prices for brand-name medications without generic or biosimilar competitors to the lowest price found in an OECD country with a GDP per capita of at least 60% of that of the United States. According to HHS Secretary Robert F. Kennedy Jr., this policy addresses the long-standing disparity between U.S. drug prices and those abroad.
“For too long, Americans have been forced to pay exorbitant prices for the same drugs that are sold overseas for far less,” said Secretary Kennedy. “That ends today. We expect pharmaceutical manufacturers to fulfill their commitment to lower prices for American patients, or we will take action to ensure they do.”
Key provisions of the order include setting price targets within 30 days for pharmaceutical companies, covering drugs under Medicare, Medicaid, and private insurance. Drugmakers failing to meet these targets within six months may face stricter price caps imposed through additional regulations.
The initiative also positions U.S. trade policies as a potential enforcement tool. Under the order, countries with policies that pressure drugmakers to set lower prices for their markets may face increased tariffs on other goods.
The policy aims to significantly reduce drug costs, with estimates suggesting price cuts ranging from 59% to 90%. However, HHS must balance the initiative’s ambitious goals with potential risks highlighted by critics. Industry groups have raised concerns that the policy could stifle innovation, lead to drug shortages, or prompt companies to withdraw products from low-priced markets. Prior legal challenges to similar initiatives in 2020 suggest these measures could face further resistance.
While the order offers the promise of substantial savings for American patients, its long-term feasibility and impact on the pharmaceutical industry remain uncertain. Nonetheless, President Trump and his administration aim to ensure that Americans no longer bear an unfair financial burden compared to patients in other developed nations.
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