Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients

5/12/2025

Executive Orders

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Action Summary

Purpose: Address the imbalance where U.S. consumers subsidize global pharmaceutical research and development by paying significantly higher prices for prescription drugs compared to other developed nations.
Policy for Most-Favored-Nation Pricing: Ensure that American patients receive the lowest prices available globally for prescription drugs and biologics to prevent overcharging.
Foreign Market Practices: Direct the Secretary of Commerce and the U.S. Trade Representative to take actions against foreign policies and practices that force U.S. patients to shoulder disproportionate costs for pharmaceutical innovation.
Direct-to-Consumer Sales: Enable pharmaceutical manufacturers to offer direct-to-consumer purchasing programs at most-favored-nation pricing, consistent with the law.
Implementation and Enforcement:
- Within 30 days, coordinate with relevant agencies to communicate price targets to manufacturers.
- Initiate rulemaking and potential certification for safe importation if significant progress is not achieved.
- Review anti-competitive practices, enforce antitrust laws, and examine export policies that may support global price discrimination.
General Provisions: Clarify that the order does not alter existing executive or statutory authority, must comply with applicable law and appropriations, and does not create enforceable rights for any party.

Risks & Considerations

The Executive Order aims to implement most-favored-nation pricing for prescription drugs, which could significantly impact the pharmaceutical industry and healthcare costs in the United States. This may lead to reduced revenue for pharmaceutical companies, potentially affecting their investment in research and development.
There is a risk of international trade tensions as the order seeks to address perceived global freeloading on American-financed pharmaceutical innovation. This could lead to retaliatory measures from other countries, affecting international relations and trade agreements.
The order’s emphasis on direct-to-consumer sales at the most-favored-nation price may disrupt existing distribution channels and pricing structures, leading to potential legal and regulatory challenges.
Vanderbilt University may need to consider how these changes in drug pricing and distribution could affect its medical research programs, particularly those reliant on pharmaceutical partnerships and funding.

Impacted Programs

Vanderbilt University Medical Center (VUMC) may experience changes in drug procurement costs, affecting budgeting and financial planning for patient care services.
Research programs at Vanderbilt that rely on pharmaceutical partnerships may need to reassess their strategies and funding sources in light of potential changes in the pharmaceutical industry’s financial landscape.
The School of Medicine may need to update its curriculum to address new regulatory and legal considerations in pharmaceutical pricing and distribution.
Vanderbilt’s Office of Federal Relations could play a crucial role in monitoring and responding to policy changes and their implications for the university’s interests.

Financial Impact

The implementation of most-favored-nation pricing could lead to reduced costs for prescription drugs, potentially lowering healthcare expenses for Vanderbilt University and its affiliates.
However, the potential reduction in pharmaceutical industry revenue may impact funding opportunities for research and development, necessitating adjustments in grant application strategies and partnerships.
Vanderbilt may need to explore alternative funding sources and collaborations to mitigate the impact of reduced pharmaceutical industry investment in research.
Changes in drug pricing and distribution could also affect the financial dynamics of Vanderbilt’s healthcare services, requiring careful financial planning and management.

Relevance Score: 4 (The order presents a need for potential major changes or transformations of programs.)

Key Actions

Vanderbilt University Medical Center (VUMC) should assess the potential impact of the most-favored-nation pricing policy on its pharmaceutical procurement strategies. By understanding how these changes might affect drug pricing and availability, VUMC can adjust its purchasing and budgeting processes to ensure continued access to necessary medications.
The Office of Federal Relations should engage with policymakers and industry stakeholders to monitor developments related to the enforcement of most-favored-nation pricing. This engagement will be crucial in advocating for policies that support Vanderbilt’s interests and in identifying opportunities for collaboration or funding.
Vanderbilt’s School of Medicine should explore research opportunities related to the economic and health impacts of most-favored-nation pricing. By conducting studies on how these pricing changes affect patient outcomes and healthcare costs, the School of Medicine can contribute valuable insights to the national conversation on drug pricing reform.
The Department of Economics should analyze the broader economic implications of the executive order on the pharmaceutical industry and healthcare markets. This analysis can inform Vanderbilt’s strategic planning and provide a basis for policy recommendations to government and industry leaders.
Vanderbilt’s Legal Department should review the potential legal implications of the executive order, particularly concerning antitrust enforcement and international trade. Understanding these legal aspects will help Vanderbilt navigate any regulatory challenges and protect its interests in the evolving healthcare landscape.

Opportunities

The executive order presents an opportunity for Vanderbilt’s Center for Health Policy to engage in policy analysis and advocacy related to drug pricing reforms. By providing evidence-based recommendations, the center can influence how these policies are implemented and ensure they align with public health goals.
Vanderbilt can capitalize on the increased focus on drug pricing by developing partnerships with pharmaceutical companies and healthcare providers. These collaborations could include joint research initiatives, clinical trials, and educational programs, enhancing Vanderbilt’s reputation and impact in the healthcare sector.
The emphasis on reducing global freeloading offers an opportunity for Vanderbilt’s International Relations Department to study the geopolitical implications of drug pricing policies. By analyzing how these changes affect international trade and diplomacy, the department can contribute to a deeper understanding of global health economics.
By engaging with the broader healthcare community and policymakers, Vanderbilt can position itself as a leader in the national conversation on drug pricing reform. Hosting conferences, workshops, and public forums on the implications of most-favored-nation pricing can further establish Vanderbilt as a hub for innovative healthcare thought and practice.

Relevance Score: 4 (The order presents the potential for major process changes required for Vanderbilt’s healthcare and research programs due to pricing impacts.)

Average Relevance Score: 4

Timeline for Implementation

Within 30 days of May 12, 2025: The Secretary must communicate most-favored-nation price targets to pharmaceutical manufacturers.

Relevance Score: 4

Impacted Government Organizations

Department of Commerce: The order mandates the Secretary of Commerce to take necessary actions, including addressing pharmaceutical exports and collaborating on policy issues.
United States Trade Representative (USTR): Tasked with ensuring that foreign trade practices do not undermine U.S. national security and equitable pharmaceutical pricing.
Department of Health and Human Services (HHS): Required to facilitate direct-to-consumer programs and coordinate pharmaceutical pricing targets.
Centers for Medicare and Medicaid Services (CMS): Involved in communicating price targets to pharmaceutical manufacturers as part of the regulatory framework.
Food and Drug Administration (FDA): The Commissioner of Food and Drugs is directed to review drug approvals, addressing potential safety and marketing issues.
Department of Justice (Attorney General): Charged with leading enforcement actions against anti-competitive practices under relevant antitrust laws.
Federal Trade Commission (FTC): Expected to undertake enforcement actions in coordination with the Attorney General to address anti-competitive behaviors as indicated in the order.
Office of Management and Budget (OMB): Its Director’s functions relating to budgetary and administrative proposals are noted to remain unaffected by this order.

Relevance Score: 3 (Approximately 8 distinct government organizations are impacted, which places the directive in the 6–10 agencies range.)

Responsible Officials

Secretary of Commerce – Tasked with addressing foreign pricing practices and coordinating on pharmaceutical export reviews.
United States Trade Representative – Required to take necessary action to prevent discriminatory practices by foreign nations.
Secretary of Health and Human Services – Charged with facilitating direct-to-consumer purchase programs and, if necessary, implementing rulemaking for most-favored-nation pricing.
Assistant to the President for Domestic Policy – Involved in coordinating with the Secretary to establish price targets for pharmaceuticals.
Administrator for the Centers for Medicare and Medicaid Services – Collaborates in communicating price targets to manufacturers.
Commissioner of Food and Drugs – Responsible for acting on certification regarding importation safety and potentially modifying drug approvals.
Attorney General – To undertake enforcement actions against anti-competitive practices as identified in related reports.
Chairman of the Federal Trade Commission – Also directed to take enforcement action against anti-competitive practices.
Heads of Agencies – Mandated to coordinate on actions to address global price discrimination and review export practices of pharmaceuticals.

Relevance Score: 5 (Directives impact high-level Cabinet officials and agency heads, influencing critical national pharmaceutical pricing policies.)