Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients
This Executive Order (EO 14297) directs the federal government to push for much lower U.S. prescription drug prices by seeking to have Americans pay the same (or the “most-favored-nation”) prices that comparable developed countries pay. It requires the Department of Health and Human Services (HHS) and other agencies to set price targets, encourage direct-to-consumer sales at those prices, and — if manufacturers do not cooperate — to pursue a range of follow-up actions including rulemaking, possible drug importation waivers, antitrust enforcement, export reviews, and regulatory reviews of drug approvals. The EO is a policy directive rather than a new law: it instructs agencies to act quickly (HHS must communicate price targets within 30 days) and to use existing legal authorities to achieve lower prices. Its potential impacts include lower patient costs if successful, increased federal involvement in pricing negotiations and importation, legal and trade challenges from industry and foreign partners, and possible downstream effects on drug prices, supply chains, and pharmaceutical innovation funding.
Key Points
- 1Purpose and policy: Declares that U.S. patients subsidize global pharmaceutical R&D by paying far higher prices, and establishes a policy goal that Americans should receive the most-favored-nation (MFN) price — i.e., prices comparable to those in other developed countries.
- 2Immediate agency action: Within 30 days HHS (coordinating with White House and CMS) must communicate MFN price targets to drug manufacturers to align U.S. prices with those in comparable developed nations.
- 3Direct-to-consumer facilitation: HHS is directed to facilitate programs that let manufacturers sell directly to U.S. patients at MFN prices, to the extent consistent with law.
- 4Escalation steps if manufacturers don’t comply: If adequate progress is not made, the EO directs a set of further responses, including (a) HHS rulemaking to impose MFN pricing, (b) consideration of FDA importation waiver certification under FDCA §804(j) to permit case-by-case importation from developed nations, (c) DOJ and FTC antitrust enforcement against identified anti-competitive conduct, (d) Commerce-led review of exports and precursor materials that may enable foreign low pricing, and (e) FDA review or potential modification/revocation of drug approvals where appropriate.
- 5Legal limits and implementation caveats: The EO says it must be implemented consistent with existing law and available appropriations, does not create private legal rights, and preserves existing statutory authorities of agencies.