Fact Sheet: President Donald J. Trump Announces Actions to Get Americans the Best Prices in the World for Prescription Drugs
7/31/2025
Action Summary
- MFN Pricing Mandate: Instructs pharmaceutical manufacturers to offer the most-favored-nation (MFN) prices to all Medicaid patients, aligning U.S. prices with those in other developed nations.
- Price Parity Requirement: Requires manufacturers to ensure that the U.S. is not charged higher prices than those offered in other developed countries for new drugs.
- Direct Patient Sales: Allows manufacturers to bypass intermediaries and sell directly to patients if prices match the best available internationally.
- Trade Policy Leverage: Implements trade policy measures to support international price increases—provided that additional revenues are reinvested into reducing U.S. drug prices.
- Enforcement Stance: Warns manufacturers of comprehensive federal action if they fail to comply with the pricing requirements.
- Scope of Impact: Letters were sent to major pharmaceutical companies including AbbVie, Amgen, AstraZeneca, and others, underscoring the broad industry focus.
- Rebalancing Global Pricing: Aims to correct the disparity where Americans pay significantly more—over three times the price paid by citizens of other OECD nations—thereby ending global free-riding on American pharmaceutical innovation.
- Context and Continuity: Follows the May 12, 2025 Executive Order “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” reinforcing ongoing efforts to secure lower prescription drug prices for U.S. patients.
Risks & Considerations
- The Executive Order aims to reduce prescription drug prices in the United States by enforcing the most-favored-nation (MFN) pricing model. This could lead to significant changes in the pharmaceutical market, affecting research funding and partnerships that Vanderbilt University may have with pharmaceutical companies.
- There is a risk that pharmaceutical companies may reduce their investment in research and development within the U.S. if their profit margins are significantly impacted by the MFN pricing model. This could affect collaborative research projects and funding opportunities for Vanderbilt University.
- The focus on reducing drug prices may lead to increased regulatory scrutiny and compliance requirements for pharmaceutical companies, which could impact the timelines and costs associated with drug development and approval processes.
- Vanderbilt University may need to consider how these changes in drug pricing policies could affect its medical and health-related programs, particularly in terms of research funding and partnerships with pharmaceutical companies.
Impacted Programs
- Vanderbilt University Medical Center may experience changes in its partnerships with pharmaceutical companies, particularly if these companies adjust their research and development strategies in response to the new pricing policies.
- Research programs focused on drug development and pharmaceutical innovation may need to adapt to potential changes in funding availability and collaboration opportunities with the pharmaceutical industry.
- The School of Medicine may need to adjust its curriculum and research focus to align with the evolving landscape of drug pricing and pharmaceutical innovation.
Financial Impact
- The implementation of MFN pricing could lead to reduced revenue for pharmaceutical companies, potentially impacting their ability to fund research and development projects. This may affect grant opportunities and funding for research initiatives at Vanderbilt University.
- Vanderbilt University may need to explore alternative funding sources and partnerships to mitigate potential reductions in research funding from pharmaceutical companies.
- There may be increased opportunities for Vanderbilt to engage in policy research and advocacy related to drug pricing and healthcare reform, potentially leading to new funding and collaboration opportunities.
Relevance Score: 4 (The order presents a need for potential major changes or transformations of programs.)
Key Actions
- Vanderbilt University Medical Center (VUMC) should evaluate the potential impact of the executive order on its pharmaceutical procurement strategies. By analyzing the implications of MFN pricing, VUMC can adjust its purchasing agreements to ensure cost-effective access to prescription drugs for its patients.
- The Office of Federal Relations should engage with policymakers and industry stakeholders to understand the broader implications of the executive order on research funding and pharmaceutical partnerships. This engagement can help Vanderbilt align its research initiatives with new federal priorities and secure funding opportunities.
- Vanderbilt’s School of Medicine should consider conducting research on the effects of MFN pricing on drug accessibility and healthcare outcomes. This research can provide valuable insights into the policy’s impact on patient care and inform future healthcare policy discussions.
- The Center for Health Policy at Vanderbilt should explore opportunities to contribute to the national dialogue on drug pricing reform. By hosting forums and publishing policy briefs, the center can position itself as a thought leader in shaping equitable drug pricing policies.
Opportunities
- The executive order presents an opportunity for Vanderbilt’s School of Medicine to collaborate with pharmaceutical companies on research initiatives that align with the MFN pricing model. By leveraging its expertise in medical research, the school can contribute to the development of cost-effective drug therapies.
- Vanderbilt can capitalize on the increased focus on drug pricing reform by developing educational programs and workshops for healthcare professionals. These programs can enhance Vanderbilt’s reputation as a leader in healthcare education and policy.
- The emphasis on reducing drug prices offers an opportunity for Vanderbilt’s Center for Health Policy to engage in policy analysis and advocacy. By providing evidence-based recommendations, the center can influence how drug pricing policies are implemented and ensure they support patient access to affordable medications.
Relevance Score: 4 (The executive order presents the potential for major process changes required for Vanderbilt’s healthcare and research programs due to impacts on drug pricing and procurement strategies.)
Timeline for Implementation
N/A: No specific timeline or deadline was provided in the text, as it only details the actions being taken without indicating when manufacturers must comply.
Relevance Score: 1
Impacted Government Organizations
- The White House: As the originating authority of the letter and executive action, it sets the policy direction for lowering prescription drug prices.
- Centers for Medicare and Medicaid Services (CMS): Although not mentioned by name, CMS is the agency responsible for administering Medicaid, to which manufacturers are now required to offer most‐favored-nation pricing.
- Office of the United States Trade Representative (USTR): The directive to use trade policy to influence international pricing strategies implies that the USTR may play a role in the implementation of these measures.
- Department of Health and Human Services (HHS): With its broad mandate over American health programs—including Medicaid—it is likely to be involved in coordinating and overseeing the impact of this pricing initiative.
- Department of Justice (DOJ): The statement that “every tool in our arsenal” will be deployed suggests that DOJ may be engaged in taking legal or enforcement actions if drug manufacturers do not comply.
Relevance Score: 2 (A moderate number of Federal agencies are impacted by the order.)
Responsible Officials
N/A – The directive is issued solely to private pharmaceutical manufacturers, and no government official has been explicitly designated to implement these actions.
Relevance Score: 1 (The directives are aimed at private companies rather than government officials.)