This week (July 31, 2025), President Donald J. Trump sent letters to leading pharmaceutical manufacturers outlining the steps they must take to be in alignment with most-favored-nation drug pricing.

The letters follow the issuance of an an Executive Order in May (May 2025) to put into motion a plan to implement most-favored-nation drug pricing in the US as a way to lower the cost of prescription drugs in the US. The premise behind most-favored-nation drug pricing is that the US pays higher prescription drug costs comparative to other developed countries and therefore assumes a larger share of the costs of drugs and that measures should be taken to reduce the differential in the prices of prescription drugs in the US compared to other developed countries, where prescription drug prices are lower. 

Following the issuance of the Executive Order in May (May 2025), the Administration engaged pharmaceutical manufacturers in discussions to achieve most-favored-nation drug pricing in the US. The follow-up letters indicate that sufficient progress was not made in voluntary initiatives.

The steps outlined this week (July 31, 2025) include:

• Calling on manufacturers to provide most-favored-nation prices to every single Medicaid patient. (Medicaid is the federal health insurance plan for low-income individuals).
• Requiring manufacturers to stipulate that they will not offer other developed nations better prices for new drugs than prices offered in the United States.
• Providing manufacturers with an avenue to sell medicines directly to patients, provided they do so at a price no higher than the best price available in developed nations.
• Using trade policy to support manufacturers in raising prices internationally provided that increased revenues abroad are reinvested directly into lowering prices for US patients and taxpayers.

Letters were sent to AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Genentech, Gilead Sciences, GSK, Johnson & Johnson, Merck Co., Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi, according to a White House factor sheet.

Source: The White House