If achieved, this has the potential to reduce prescription drug costs for patients, which could increase access. However, this may have implications for global health equity, raising costs in markets that currently benefit from lower-cost drugs. Structural issues that drive up the cost of drugs have to do with abuse of the patent system, preventing the development of lower cost generics and biosimilars, and this executive order does little to address this issue. Additionally, these efforts may run up against system realities and ultimately have little effect.
Executive Office of the President - White House Office
A directive issued by the President that manages operations of the federal government. Executive orders have the force of law but must align with existing statutes and constitutional authority.
Who It Impacts: Federal agencies and employees, directing them on how to implement laws or carry out government functions. Executive orders can also influence businesses and individuals when they relate to issues like immigration, trade, or labor policies.
Who Is Not Impacted: Private citizens and businesses do not have to directly follow an executive order unless it leads to regulations or policies that apply to them. For example, an executive order directing federal agencies to increase renewable energy use does not mandate action from private companies, but it may influence policy shifts that eventually affect them.
Date Enacted
May 12, 2025
Last Updated
December 19, 2025
Policy Type
Healthcare Delivery, Services & Quality
Global Health
Summary
This executive order directs the Secretary of Commerce and the U.S. Trade Representative to take actions to prevent the suppression of pharmaceutical prices below fair market value abroad. It also directs the Secretary of Health and Human Services (HHS) to establish direct-to-consumer purchasing programs to obtain lower prices for American patients. The HHS Secretary, the Assistant to the President for Domestic Policy and the Centers for Medicare & Medicaid Services Administrator are responsible for setting “Most Favored Nation (MFN)” price targets for pharmaceutical manufacturers (“the lowest price in an OECD country with a GDP per capita of at least 60% of the U.S. GDP per capita.”). If targets are not met, then MFN pricing may be imposed, and legal action, import/export regulations and drug review actions may be taken.
Impact Analysis
Legal Challenges
N/A
Take Institutional Action
Monitor the implementation of this executive order to determine impact and response.
Associated or Derivative Policies
N/A
Policy Prior to 2025
N/A
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