Fact Sheet: President Donald J. Trump Announces Actions to Put American Patients First by Lowering Drug Prices and Stopping Foreign Free-riding on American Pharmaceutical Innovation

5/12/2025

Fact Sheets

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Action Summary

Objective: Lower prescription drug prices for Americans and taxpayers by aligning them with the prices paid in comparable nations.
Market Parity Initiative: Directs the U.S. Trade Representative and Secretary of Commerce to counteract foreign practices that unfairly undercut U.S. market prices and contribute to price hikes.
Pricing Mechanism: Instructs the Secretary of Health and Human Services (HHS) to establish a system enabling American patients to purchase drugs directly from manufacturers at “Most-Favored-Nation” pricing, bypassing intermediaries.
Enforcement Actions: If manufacturers do not offer most-favored-nation pricing, HHS is tasked to propose rules enforcing such pricing and implement additional measures to substantially reduce drug costs and end anticompetitive practices.
Addressing Price Disparities: Targets the issue where Americans pay more than three times the price of brand-name drugs compared to other OECD nations, highlighting the problem of cross-subsidization where U.S. consumers effectively subsidize discounts abroad.
Historical and Expanded Measures: Builds on President Trump’s previous efforts—including actions during his first term—to protect Medicare and seniors, now expanded to include Medicaid, and criticizes recent policy changes under the current administration that led to higher negotiated prices.
Additional Initiatives: References further executive actions aimed at providing massive discounts for low-income patients, enhancing importation programs, boosting generic and biosimilar availability, and improving transparency in drug pricing.

Risks & Considerations

The Executive Order aims to lower drug prices in the U.S., which could impact the pharmaceutical industry significantly. This may lead to reduced revenue for pharmaceutical companies, potentially affecting research funding and partnerships with academic institutions like Vanderbilt University.
Vanderbilt’s research programs that rely on pharmaceutical partnerships or funding might face financial constraints if drug manufacturers experience decreased profits and subsequently reduce their investment in research and development.
The focus on price transparency and most-favored-nation pricing could lead to increased regulatory scrutiny and compliance requirements for research institutions involved in pharmaceutical studies, necessitating adjustments in operational practices.
There is a potential risk that the Executive Order could lead to a reduction in the availability of certain drugs if manufacturers choose to limit their offerings in the U.S. market due to pricing pressures, impacting clinical research and patient care at Vanderbilt’s medical facilities.

Impacted Programs

Vanderbilt University Medical Center (VUMC) may need to adjust its procurement strategies for prescription drugs to align with new pricing regulations and ensure continued access to necessary medications for patient care.
Vanderbilt’s School of Medicine could see changes in its research funding landscape, particularly for projects involving pharmaceutical collaborations, necessitating a reevaluation of funding sources and research priorities.
The Office of Research at Vanderbilt may need to enhance its compliance and regulatory frameworks to address new requirements related to drug pricing transparency and partnerships with pharmaceutical companies.
Vanderbilt’s Center for Health Policy might find opportunities to engage in policy analysis and advocacy related to drug pricing reforms, contributing to national discussions on healthcare affordability and access.

Financial Impact

The Executive Order could lead to a shift in the financial dynamics of the pharmaceutical industry, potentially affecting grant opportunities and funding availability for research initiatives at Vanderbilt University.
Vanderbilt may need to explore alternative funding sources or partnerships to mitigate potential reductions in pharmaceutical research funding and ensure the sustainability of its research programs.
There could be increased opportunities for Vanderbilt to engage in research and policy development related to drug pricing and healthcare affordability, potentially attracting new funding and collaboration opportunities.
The focus on reducing drug prices may lead to cost savings for Vanderbilt’s healthcare facilities, potentially impacting budget allocations and financial planning for patient care services.

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 drug pricing for its patients and research programs. By understanding the changes in drug pricing, VUMC can adjust its procurement strategies to ensure cost-effective access to medications for patients and research purposes.
The Office of Federal Relations should monitor developments related to the Executive Order and engage with policymakers to advocate for policies that support affordable drug pricing while ensuring the sustainability of pharmaceutical research and innovation.
Vanderbilt’s School of Medicine could explore research opportunities related to the impact of drug pricing reforms on healthcare access and outcomes. This research can contribute to the national dialogue on healthcare policy and position Vanderbilt as a leader in health policy research.
The Center for Health Policy should analyze the implications of the Executive Order on Medicaid and Medicare drug pricing. By providing evidence-based policy recommendations, the center can influence how these changes are implemented and ensure they benefit patients and healthcare providers.
Vanderbilt’s Financial Aid Office should assess the potential impact of reduced drug prices on student healthcare costs. Understanding these changes will be essential for adapting financial aid strategies to support students’ health and well-being.

Opportunities

The Executive Order presents an opportunity for Vanderbilt’s School of Medicine to expand its research on the economic and clinical impacts of drug pricing reforms. By leveraging its expertise in health economics and policy, the school can contribute valuable insights to the national conversation on drug pricing.
Vanderbilt can capitalize on the increased focus on drug price transparency by developing educational programs and workshops for healthcare professionals and policymakers. This initiative can enhance Vanderbilt’s reputation as a thought leader in healthcare policy and education.
The emphasis on reducing drug prices for low-income patients offers an opportunity for Vanderbilt’s Center for Health Services Research to engage in policy analysis and advocacy. By providing evidence-based recommendations, the center can influence how these policies are implemented to support healthcare equity and access.
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 drug pricing policies can further establish Vanderbilt as a hub for innovative healthcare thought and practice.

Relevance Score: 4 (The Executive Order presents the potential for major process changes required for Vanderbilt’s healthcare programs due to impacts on drug pricing and access.)

Average Relevance Score: 3

Timeline for Implementation

N/A — The directive does not specify any deadlines or enforcement periods for implementation.

Relevance Score: 1

Impacted Government Organizations

U.S. Trade Representative (USTR): Directed to take action ensuring foreign countries do not engage in pricing practices that undercut U.S. market prices for prescription drugs.
Department of Commerce: The Secretary of Commerce is tasked with collaborating to adjust price disparities and support the executive order’s directives.
Department of Health and Human Services (HHS): Charged with establishing mechanisms for direct drug purchasing at most-favored-nation pricing and proposing necessary rules to curb anticompetitive practices, affecting Medicare and Medicaid programs.

Relevance Score: 2 (A limited number of federal agencies are directly impacted by the executive order.)

Responsible Officials

U.S. Trade Representative – Tasked with ensuring that foreign countries are not engaging in practices that unfairly undercut U.S. drug prices.
Secretary of Commerce – Responsible for taking action in collaboration with the USTR to address and counteract pricing practices that contribute to higher domestic drug costs.
Secretary of Health and Human Services – Charged with establishing mechanisms for American patients to buy drugs directly at “Most-Favored-Nation” prices and proposing rules to enforce such pricing if manufacturers do not comply.

Relevance Score: 4 (Directives affect agency heads with significant executive responsibilities.)