On May 12, 2025, President Trump issued Executive Order 14297[1] targeting prescription drug prices in America. The stated purpose of this order is to combat high drug prices in the United States, bringing the prices Americans pay for drugs more in line with prices in the global marketplace. The United States “pays the most for prescription medicines in the world, often nearly three times that of other developed nations.”[2] “In 2021, the US Government Accounting Office made a comparison with Australia, Canada and France, and found that prescription drugs were on average two to four times more expensive in the US.”[3] Executive Order 14297 attempts to remedy this.
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.[4]
The Order directs John F. Kennedy Jr., the current Secretary of Health and Human Services, to “facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers that sell their products to American patients at the most-favored-nation price.” Most-favored-nation pricing would require drug companies to “match the lowest price for a drug abroad when selling to US consumers.”[5] Within 30 days of the Order’s issuance, the Secretary shall “communicate most-favored-nation price targets to pharmaceutical manufacturers to bring prices for American patients in line with comparably developed nations.”[6] If “significant progress” is not made, “the Secretary shall consider certification to the Congress that [individual] importation . . . will pose no additional risk to the public’s health and safety and result in a significant reduction in the cost of prescription drugs to the American consumer.”[7] If so certified, the Commissioner of Food and Drugs “shall publish . . . guidance” describing circumstances “under which waivers will be consistently granted to import prescription drugs on a case-by-case basis” by individuals, thereby permitting the personal importation of lower cost prescription drugs from developed nations.[8] Under the Order, the Secretary and other federal officials “shall” take additional actions to spur progress, such as rulemaking and reviewing and potentially revoking existing drug approvals.[9]
However, Executive Order 14297 may be quite complicated to implement. The United States relies on the private sector to negotiate drug prices. Conversely, other countries negotiate their drug prices through their National Health Services, which can exert more leverage than private sector negotiators.[10] Also, many drugs sold in the United States are only sold in the United States, making the referencing of foreign prices impracticable for establishing American drug pricing.[11] If the Trump administration succeeds in lowering drug prices for Americans, other countries may follow this renegotiation path, which could stifle drug development and availability. In order to recoup lost profits, “drugs [sic] companies could simply pull out of other nations in which they are selling their products more cheaply,”[12] thereby raising the most-favored-nation price and decreasing global availability.
In addition to the difficulty in adjusting drug pricing, the concept of selling more drug products directly to consumers poses increased safety and trade concerns, as it allows American consumers to bypass existing administrative hurdles.[13] The approach set forth in the Order may also inject greater uncertainty into the market, as the standards for “unreasonable or discriminatory” practices and the mechanisms to “punish” noncompliant drug companies have not been revealed.[14]
The Order may also impact generic drug manufacturers and the availability of generic drugs. One of the principal features of the Hatch-Waxman Act is to allow generic drugs to use the research and development data of brand name drugs when seeking FDA approval. However, if brand name drug companies cannot recapture their steep research and development costs, drug companies may lobby to keep generic drugs off the market longer.
While lower cost prescription drugs have wide appeal among Americans and Executive Order 14297 is an early attempt to effectuate that change, much remains uncertain. From the vague language and lack of clarity of the Order to hurdles within the current prescription drug infrastructure in America, only time will tell how the government, drug companies, and the global marketplace respond.
Editor: Brenden S. Gingrich, Ph.D.
[1] Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients, 90 Fed. Reg. 20749 (May 15, 2025)
[2] Maggie Fick, What has Trump said about cutting drug prices?, Reuters (May 13, 2025, 4:53 AM), https://www.reuters.com/business/healthcare-pharmaceuticals/what-has-trump-said-about-cutting-drug-prices-2025-05-12/.
[3] Mike Wendling & Laura Blasey, Trump’s order on US drug prices: What’s in it, and will it work?, BBC (May 12, 2025), https://www.bbc.com/news/articles/c93l7k3x5dpo.
[4] 90 Fed. Reg. 20749.
[5] Wendling & Blasey, supra note 3.
[6] 90 Fed. Reg. at 20750.
[7] 90 Fed. Reg. at 20750; see Federal Food, Drug, and Cosmetic Act (FDCA) § 804(j), 21 U.S.C. § 384(j).
[8] 21 U.S.C. § 384(j)(2)(B); 90 Fed. Reg. at 20750.
[9] 90 Fed. Reg. at 20750.
[10] See Fick, supra note 2.
[11] Fick, supra note 2.
[12] Wendling & Blasey, supra note 3.
[13] Wendling & Blasey, supra note 3.
[14] Wendling & Blasey, supra note 3.
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