The Trump administration has issued numerous pharma-focused executive orders, including “Lowering Drug Prices by Once Again Putting Americans First,” “Regulatory Relief to Promote Domestic Production of Critical Medicines,” and “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” These executive orders urged manufacturers to eliminate discrepancies in drug pricing in the United States compared to other advanced countries, instructed agencies to identify and eliminate regulations and guidance that hindered the development of domestic pharmaceutical manufacturing, and authorized agencies to bring enforcement actions and engage in rulemaking to enforce compliance.
Recently, the administration ratcheted up its rhetoric, publicly posting letters to 17 major pharmaceutical companies, demanding that they take steps within the next 60 days to provide most-favored-nation (MFN) pricing to American consumers, or face adverse actions. Shortly before the administration issued the letters, the Food and Drug Administration also opened applications for its new Commissioner’s National Priority Voucher (CNPV) pilot program, which promised to reduce the review time for drug applications to one to two months, down from 10 to 12 months. The FDA indicated that the small number of vouchers available would go to manufacturers aligned with “critical U.S. national health priorities,” including those laid out in executive orders. In parallel, the administration has publicly stated that pharmaceutical imports are likely to face stepwise tariff hikes, with lower initial rates that are progressively increased over the next year or so. Such hikes may shift the advantage to domestic manufacturers and innovators.
The administration’s collective actions suggest a mix of approaches to reward or penalize pharmaceutical companies to push alignment with the goals set out in the executive orders. Whether this combination will be successful remains to be seen.
FDA CNPV Pilot Program
While the FDA already has several programs in place to expedite drug approval in certain categories, the new CNPV program promises to complete the drug review process in one to two months, provide increased access to FDA officials, and set up multidisciplinary teams of FDA experts to conduct swift, comprehensive reviews. To qualify for vouchers, applicants’ products or operations must meet at least one of the priority areas, each of which is accompanied by FDA guidance:
- Addressing a U.S. public health crisis. For example, a universal vaccine providing broad protection against multiple strains of influenza, including those with pandemic potential.
- Delivering more innovative cures for the American people. Transformative products, for example, a novel immunotherapy that reprograms the body’s immune system to fight multiple diseases or transforming mental health care through a novel treatment for post-traumatic stress disorder.
- Addressing a large unmet medical need. Treatments for conditions available therapies do not adequately address, including drugs to treat or prevent rare diseases or those addressing the U.S. chronic disease crisis.
- Onshoring drug development and manufacturing to advance the health interests of Americans and strengthen U.S. supply chain resiliency. These include companies shifting the manufacturing of essential medicines to the U.S. or a clinical trial with robust U.S. enrollment to support generalizability for Americans against the U.S. standard of care.
- Increasing affordability. These include manufacturers providing U.S. consumers with MFN pricing or reducing other medical utilization to lower overall health care costs.
Although the FDA’s exclusive authority is limited to ensuring the efficacy and safety of drug products for American consumers and not price-setting or other policy directives, the incentive structure of the CNPV suggests that the FDA may be exercising its authority in a manner designed to further policy goals, including building domestic manufacturing capacity, and MFN pricing for U.S. consumers.
Letters to Manufacturers on MFN Compliance
On July 31, 2025, President Trump sent letters to 17 major pharmaceutical companies addressing his reactions to their plans to address his MFN order. The letters urged the recipients to stop “shifting blame and requesting policy changes that would result in billions of dollars in handouts to the industry.” The letters demanded that within 60 days, the manufacturers must:
- Extend MFN pricing to all patients on Medicaid on the full portfolio of the company’s drugs.
- Guarantee MFN pricing for newly launched drugs to Medicare, Medicaid, and commercial payers both upon launch and moving forward.
- Return increased revenues abroad to American patients and taxpayers, through an explicit agreement with the United States. The letters offered to leverage U.S. trade policy to assist pharmaceutical companies in their negotiations with foreign companies.
- Provide for direct purchasing at MFN pricing by participating in direct-to-consumer or direct-to-business distribution models for high-volume, high-rebate prescription drugs so all Americans get the same MFN prices that manufacturers already offer to third-party payers.
The letters inform manufacturers that if they “refuse to step up,” the federal government “will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.”
Tariffs
In the trade deal reached between the United States and the European Union on July 27, a 15% tariff was imposed on imported medicines from Europe. In addition to such tariffs, President Trump has made public statements indicating that tariffs may be increased incrementally to 250% or more, to compel compliance with the administration’s drug pricing objectives.
Takeaways
Since taking office in January 2026, President Trump has issued multiple executive orders aligned with his campaign promises to bring back manufacturing to the United States and reduce drug pricing. While the orders set out ambitious policy goals, some commentators have questioned the administration’s authority to implement these orders, especially in controversial areas like mandatory pricing limitations, as such initiatives have met with limited success in the past. The Trump administration has engaged, without success, in private discussions with some pharmaceutical companies to encourage compliance with executive order goals.
The administration’s latest initiatives appear to be a mix of incentives and penalties, and thus far, at least, targeted companies have not challenged the administration’s authority in court. Whether pharmaceutical companies will continue to work with the administration to find solutions or turn to the courts for relief remains to be seen, especially where the administration appears to be harnessing the power of agencies to incentivize compliance.
