Most Favored Nation policy could force pharma giants to match lowest global drug prices under revived White House plan.

By yourNEWS Media Newsroom

Prescription drug prices in the United States remain the highest in the world, with Americans often paying several times more for common medications than patients abroad. Now, President Donald Trump is reviving efforts to force pharmaceutical companies to match the lowest prices offered in comparable developed nations—a move that could reshape the drug pricing landscape and reignite legal challenges shelved under the prior administration.

On May 12, Trump reintroduced his signature Most Favored Nation Prescription Drug policy, requiring pharmaceutical firms to offer their lowest global price to American consumers. The plan mirrors an earlier initiative from the final months of Trump’s first term, which was blocked by court challenges and subsequently rescinded by President Joe Biden.

The Trump administration has already taken more than a dozen actions aimed at reducing drug costs. These include a 2020 proposal to ban pharmacy benefit managers from retaining manufacturer rebates and a pilot program capping insulin costs at $35 a month for Medicare Part B recipients—a policy later expanded under the Inflation Reduction Act of 2022. By 2024, major insulin manufacturers voluntarily capped out-of-pocket prices to the same level for all U.S. patients.

Still, Americans routinely pay two to five times more for prescription medications than consumers in peer nations. A 2021 Government Accountability Office report cited the diabetes drug Trulicity as costing just $67 in France compared to $798 in the U.S. The oral cancer drug Revlimid was listed at $4,723 in Australia but nearly $22,048 in America.

The disparity stems largely from structural differences. Unlike Australia, Canada, and France—which use national health plans to set or negotiate drug prices—the United States lacks centralized authority over pharmaceutical pricing. In Australia, an independent advisory committee assesses a drug’s cost-effectiveness before the federal health minister negotiates its price. In Canada, the federal government sets price ceilings, and provincial health plans jointly bargain with manufacturers. The French government bases drug price negotiations on therapeutic value assessments and imposes spending caps.

However, these national strategies come with trade-offs. When a drug is excluded from coverage under a centralized system, patients may have limited access to it entirely, or face prohibitively high prices. For example, Signifor, a hormonal treatment, was unavailable in Ontario, and some formulations of Trulicity were not listed in Australia. Revlimid 5 mg and 10 mg capsules were not available in France, according to the GAO report.

There are also concerns about supply stability. “Shortages are a natural outcome of imposing prices divorced from free market processes,” said Jeremy Nighohossian of the Competitive Enterprise Institute. Pharmaceutical Research and Manufacturers of America CEO Stephen Ubl warned that “importing foreign prices from socialist countries would be a bad deal for American patients and workers,” arguing it would reduce investment in domestic research and make the country more reliant on China for drug manufacturing.

In the U.S., price negotiations are fractured across Medicare, Medicaid, private insurers, and pharmacy benefit managers. The Inflation Reduction Act authorized Medicare to negotiate prices for select drugs beginning in 2026, with initial discounts of 40 to 80 percent on ten medications. However, none of the more expensive biologics used for cancer or autoimmune diseases are included.

“Private insurers negotiate the price of all drugs with manufacturers, so why is the federal government only negotiating a handful each year?” asked C. Michael White of the University of Connecticut School of Pharmacy.

Meanwhile, pharmacy benefit managers, or PBMs, are facing scrutiny for their opaque business practices. “As the middleman, they determine what medications a patient can use and how much the patient pays at the pharmacy counter,” Sen. Chuck Grassley (R-Iowa) told a Senate Judiciary Committee hearing. Grassley has introduced legislation requiring PBMs to disclose pricing and service fee details.

On Capitol Hill, lawmakers are divided between targeted reforms and sweeping overhauls. Sens. Josh Hawley (R-Mo.) and Peter Welch (D-Vt.) introduced the Fair Prescription Drug Prices for Americans Act on May 5, which would compel manufacturers to offer U.S. buyers prices no higher than those charged in comparable nations. Additional provisions are included in the Republican budget reconciliation bill to expand Medicaid pricing transparency.

Still, critics argue these efforts are patchwork fixes. “All these other things are short-sighted, unsustainable measures that are not going to produce the result,” said Sen. Thom Tillis (R-N.C.). He urged Congress to take a holistic view of the entire pharmaceutical supply chain.

The first round of target prices under Trump’s revived Most Favored Nation policy is scheduled to be issued to manufacturers by June 11. Whether the plan survives legal scrutiny this time may determine the future trajectory of American drug pricing reform.

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