May 12, 2025

Don’t be Fooled by Trump’s “Most-Favored Nation” Executive Order

Trump’s Order Is an Attempt to Distract from Republican Efforts to Raise Drug Prices and Take Away Health Care from Millions of People

Memo on Trump's "Most-Favored Nation" Drug Pricing Executive Order

Key Takeaways

• Bringing U.S. drug prices down to levels obtained in other countries has broad bipartisan support, but Trump’s Executive Order (EO) is unlikely ever to achieve that goal.
• Trump’s EO is a naked attempt to distract from Republican efforts to exclude more drugs and delay negotiations years longer in the Medicare drug price negotiation program.
• Attacking other countries that more effectively combat drug corporation price gouging will do nothing to lower prices in the United States.
• If Trump and congressional Republicans were serious about lowering U.S. drug prices to those paid in other countries, they would achieve it through strengthening and expanding the Medicare drug price negotiation law, not ill-conceived executive dictates.
• Instead, Trump and congressional Republicans are seeking legislation to take away health care from millions of people in order to give tax cuts to billionaires and corporations, including prescription drug corporations.

Background

• The Trump administration first proposed a confused international reference pricing-themed model in an Advanced Notice of Proposed Rulemaking (ANPRM) for Medicare Part B in 2018. The model languished without action until after Trump lost the 2020 presidential election.
• The proposal faced immense congressional resistance; 13 Senate Finance Committee Republicans voted in favor of blocking the “International Price Index” model in 2019.
• After losing the 2020 election, the Trump administration released an updated Interim Final Rule of its proposal, rebranded as the Most Favored Nation Model. The CMS Office of the Actuary estimated dramatic decreases in patient access to prescription drugs impacted by the model because Trump’s proposal failed to ensure physician offices were able to obtain drugs at prices that are not higher than the levels at which Medicare reimburses. (This problem could be avoided if instead prices were lowered by incorporating an international reference price-based ceiling in the Medicare Drug Price Negotiation Program through legislation.)
• Because the administration rushed out the Interim Final Rule at the last minute without following administrative procedures, the proposal faced legal jeopardy and was ultimately withdrawn by the Biden administration.
• Now, congressional Republicans are pursuing through budget reconciliation legislation to lengthen the delay before Medicare is permitted to negotiate drug prices from 7 to 11 years after a drug receives FDA approval and to widen the orphan drug loophole, excluding many more costly medicines from ever facing Medicare price negotiations.
• In an executive order last month, President Trump pressured congressional Republicans to include the negotiation delay proposal in its budget reconciliation megabill.

The “Most-Favored Nation” Executive Order

• The EO directs the HHS Secretary to communicate “most-favored nation price targets” to drug corporations to get “the best deal”. However, the U.S. government does not currently have the authority to negotiate prices across the U.S. market or compel drug corporations to offer the prices it dictates.
• The EO directs the HHS Secretary to facilitate a new direct-to-consumer purchasing program for drug companies that sell products to American patients at the most-favored nation price, but it is not clear through what legal authority this would be accomplished, or what power the administration possesses to compel drug corporations to lower prices for such a program. The overwhelming majority of patients obtain prescription drugs through public insurance programs or private insurance plans.
• The EO references unspecified HHS rulemaking, on an unspecified timeline, to force drug corporations to lower prices if the HHS Secretary’s negotiations are not successful. As noted above, previous Trump rulemaking efforts on international reference pricing were deeply flawed and never advanced.
• The EO directs the Attorney General and Chairman of the FTC to undertake enforcement actions against anticompetitive practices. Enforcing current laws against anticompetitive practices can have some positive results but is unlikely to have a substantial impact on the overall prescription drug market or pricing.
• The EO instructs the HHS Secretary to consider certifying that drug importation pose no risk to public health and safety, but a previous attempt by the Trump administration to support drug importation in his first term still has not resulted in any drugs being imported.
• The EO directs the U.S. Trade Representative and Department of Commerce to pressure other countries to raise prices, but higher prices internationally will do nothing to lower prices for American patients and taxpayers. When people in the United States say they want the same prices as other countries, they do not mean that we should bully other countries into permitting more drug corporation price gouging like policymakers allow here.

Conclusion

Trump’s EO is poorly conceived and very unlikely to result in lower prices for U.S. patients and taxpayers.

It is an attempt by the Trump administration to “flood the zone” and obfuscate efforts to take away health care from millions of people to pay for tax cuts to billionaires and corporations, all while delivering drug corporations their top lobbying priority in reconciliation: undermining the Medicare Drug Price Negotiation Program.

Policymakers should instead support strengthening and improving the Medicare Drug Price Negotiation Program. An overwhelming majority of Americans support Medicare negotiating prices for more drugs, not exempting more drugs from negotiation.

Please reach out to Public Citizen Access to Medicines Advocate, Steven Knievel (sknievel@citizen.org), with any questions.  For more information, also see Public Citizen’s Fact Sheet: Delaying Drug Price Negotiations = More Big Pharma Price Gouging and Issue Brief: Protecting Medicare Drug Price Negotiations.