Moreover, in May 2025, the Trump Administration issued an executive order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” Executive Order, which may have unpredictable consequences on the pricing of medicinal products in European countries. The Executive Order required federal agencies to seek parity between U.S. drug prices and the lowest prices in peer nations and empowers the Secretary of HHS to establish and communicate most-favored-nation price targets to manufacturers, including through rulemaking if voluntary efforts by manufacturers prove inadequate. In accordance with this Executive Order, CMS has taken action to implement “most-favored-nation” pricing, including by announcing a new voluntary payment model where drug manufacturers may offer supplemental rebates to participating state Medicaid programs to provide such Medicaid programs with a “most favored nation” price for participating manufacturers’ products, as well proposing mandatory payment models where, if finalized, manufacturers of certain Medicare Part B and Medicare Part D drugs would be assessed rebates if the prices for such product exceed those paid in economically comparable countries. It remains to be seen how these drug pricing initiatives will affect the broader pharmaceutical industry.
