Trump Gives Pharma CEOs 60-Day Ultimatum for ‘Most Favored Nation’ Drug Pricing
On July 31, 2025, President Trump demanded that 17 major drug manufacturers commit within 60 days to selling drugs in the U.S. at 'most favored nation' (MFN) prices—the lowest rates offered to economically comparable countries123.
Trump sent identical letters, later posted on Truth Social, to CEOs of companies including Novo Nordisk, Eli Lilly, Pfizer, AbbVie, GlaxoSmithKline, Merck, Johnson & Johnson, Novartis, and Sanofi, among others12345.
The letters require companies to extend MFN pricing to Medicaid and newly launched drugs, and to offer direct purchasing at MFN rates for high-volume, high-rebate medicines1.
Trump threatened to use 'every tool in our arsenal,' including potential tariffs and enforcement actions, should the firms refuse to comply12.
The MFN initiative revives a controversial executive order first proposed in May 2025 (and echoing a shelved 2020 proposal), aiming to address the disparity in drug prices, which are often significantly higher in the U.S. than abroad1235.
Analysts and industry experts doubt the administration's legal authority to enforce MFN pricing solely through executive action, noting the proposal faces legal and logistical obstacles23.
Pharmaceutical stock prices dropped sharply after the announcement, reflecting market concern about the financial impact of the policy3.
Sources:
1. https://www.axios.com/2025/07/31/trump-us-drug-prices-deadline
2. https://www.biospace.com/policy/trump-asks-big-pharmas-to-move-on-most-favored-nation-drug-pricing-or-else
3. https://www.ajmc.com/view/trump-directs-pharma-companies-on-cutting-drug-prices-under-most-favored-nation-order