Federal Initiatives to Align U.S. Drug Prices With Global Rates
Recent federal initiatives and related agreements may affect prescription drug pricing in the United States. Actions by the Trump administration and federal agencies, along with subsequent commitments from major pharmaceutical manufacturers, aim to reduce U.S. drug costs by aligning them with the lowest prices paid by other developed nations, a strategy referred to as the “most-favored-nation” (MFN) price.
Executive Orders
On May 12, 2025, President Donald Trump issued an Executive Order (EO) directing federal officials and agencies to prevent foreign practices that undercut U.S. market prices, establish a mechanism for Americans to purchase drugs directly from manufacturers at MFN prices, and communicate price targets to pharmaceutical manufacturers. On May 20, 2025, federal agencies released a statement detailing how they expect to satisfy the EO’s requirements.
Industry Agreements
Following the EO, major manufacturers such as Pfizer, Eli Lilly and Novo Nordisk agreed to MFN pricing and direct-to-consumer discounts via TrumpRx.gov, a federally operated website that is expected to launch in 2026.
Action Steps
The impact of these initiatives on drug prices remains to be seen, so employers and plan sponsors should monitor developments and consider the following proactive steps to prepare for MFN pricing changes:
- Review prescription drug coverage to align with anticipated cost reductions for high-cost medications;
- Engage pharmacy benefit managers and carriers to confirm readiness for MFN pricing and evaluate whether savings can be passed through to employer-sponsored plans; and
- Update employee communications to explain upcoming changes, including potential TrumpRx.gov options and how they interact with existing benefits.
Implementation Timeline
May 2025
EO was issued, titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” Federal agencies also released implementation guidance.
Sept. 30, 2025
Pfizer MFN agreement was announced.
Nov. 6, 2025
Eli Lilly and Novo Nordisk MFN agreement was announced.
2026
TrumpRx.gov is anticipated to launch.
Potential Legal Hurdles
Industry professionals expect the EO to face legal challenges, citing a similar proposal from Trump’s first term that aimed to link Medicare payments for certain drugs to the lowest prices paid by other countries. The earlier proposal was blocked by federal courts for not adhering to the notice and comment process required by the Administrative Procedure Act. Employers and plan sponsors should continue to monitor developments closely.
Contact us if you would like to speak to a Benefits Advisor about reevaluating your company benefits.
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