The latest news on US government action on tariffs and plans to implement most-favored national drug pricing in the US as part of drug-pricing reforms.  

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US Gov’t in Next Legal Battle Over Tariffs 
A US federal appeals court this week (May 29, 2025) temporarily paused a ruling made earlier this week (May 28, 2025) by the US Court of International Trade that had ruled that the Trump Administration did not have legal authority to unilaterally impose tariffs on US trading partners.   

The Trump Administration first laid out a plan for imposing reciprocal tariffs in February (February 2025) as a means to counter non-reciprocal trading arrangements with US trading partners and as a way to improve US competitiveness, including in manufacturing. Those reciprocal taxes were scheduled to go into effect on April 9, 2025, but the Trump Administration placed a 90-day pause (until July 9, 2025) on the implementation of reciprocal tariffs to enable countries to negotiate with the US government. Separately, the Administration imposed a 10% universal or baseline tariff on most countries.  

Since that time, the Trump Administration had said it was working with US trading partners to negotiate trade deals. Earlier this month (May 2025), President Trump had announced a potential tariff of 50% on the European Union (EU) to take effect June 1, 2025, due to the US position that a lack of progress in trade negotiations with the EU had been made, but the Trump Administration had agreed to extend that deadline for imposing additional tariffs to July 9, 2025, the original deadline in which the EU and other countries were given to negotiate trade deals to avoid the imposition of reciprocal tariffs. 

The status of reciprocal tariffs is now temporarily on hold as a battle continues over the legality of the action by the Trump Administration to impose those tariffs unilaterally without Congressional authorization. In an Executive Order issued on April 2, 2025, which outlined the plan for reciprocal tariffs, the Trump Administration cited that the large US trade deficit represented a national emergency and under executive emergency powers, the President was authorized to impose such tariffs. The ruling by the US Court of International Trade this week (May 28, 2025) countered that position and ruled that the Administration did not have the authority under the International Emergency Economic Powers Act to impose such tariffs.  

The United States Court of Appeals for the Federal Circuit on May 29, 2025, then put a stay on an administrative basis on that decision by the US trade court until early June (June 2025) to allow both sides (the Trump Administration and the plaintiffs in the US trade court case [certain states an domestic small businesses]) to submit written legal arguments. The plaintiffs have until June 5, 2025, to submit their arguments, and the Trump Administration has until June 9, 2025, to respond.

Source: White House Press Briefing (May 29, 2025), Trump Administration (May 25, 2025 social media post) and European Commission (May 25, 2025 social media post) 

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US Gov’t Takes Next Step in Most-Favored-Drug Pricing Plan 
Following up on Executive Order issued by President Donald Trump earlier this month (May 2025), the US Department of Health and Human Services and the Centers for Medicare and Medicaid Services (CMS) report that they have identified most-favored-nation (MFN) pricing targets for which pharmaceutical manufacturers are expected to meet to satisfy the requirements of the Executive Order. The HHS said that these commitments will be highlighted in the coming weeks (as reported on May 20, 2025).

MFN drug pricing means that the price of a drug in the US would be set no higher than the price of that drug in comparable countries, mostly developed nations. The Executive Order first seeks voluntary price concessions from pharmaceutical manufacturers for lower drug pricing, and then outlines a series of steps that the Administration would take if such voluntary price concessions are not made, including allowing for importation of lower-cost drugs into the US and a rulemaking plan to implement MFN drug pricing.  

The MFN drug pricing program seeks to align US pricing for all brand products across all markets that do not currently have generic or biosimilar competition with the lowest price set by economic peer countries to the US. The MFN target price is the lowest price in a country in the Organization for Economic Co-operation and Development (OECD) with a gross domestic product (GDP) per capita of at least 60% of the US GDP per capita. The premise behind the Executive Order 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. 

Separately, the US Department of Labor, HHS, and the Treasury Department jointly issued a Request for Information (RFI) seeking public input on how to improve prescription drug price transparency. The RFI seeks input regarding prescription drug price disclosure requirements, including information on existing prescription drug file data elements and information on implementation generally, such as the ability of health plans to access necessary data for reporting, as well as state approaches and innovation.  

Source: US Department of Health and Human Services and Centers for Medicare and Medicaid Services