President Donald Trump issued an executive order (EO) on May 12, 2025 to address the high cost of prescription drugs in the United States with the goal of ensuring Americans have access to most-favored-nation (MFN) pricing, which aligns drug prices in the United States with those in comparably developed countries.
The EO directs the Secretary of Health and Human Services (HHS) to facilitate programs for direct-to-consumer purchasing from pharmaceutical manufacturers at MFN prices. Within 30 days, HHS must also coordinate with other agencies to communicate MFN price targets to pharmaceutical manufacturers. If “significant progress” toward MFN pricing for Americans is not delivered, the EO requires HHS to take further regulatory actions.
Key provisions of the EO include the following:
Direct-to-Consumer Sales at MFN Prices
HHS is tasked with facilitating programs that allow consumers to purchase prescription drugs directly from manufacturers at MFN prices, bypassing traditional supply chains.
Communicating MFN Pricing Targets
HHS is directed to communicate MFN pricing targets to pharmaceutical manufacturers within 30 days of the EO.
HHS Actions If Programs Are Inadequate:
If “significant progress” toward MFN pricing is not achieved, the EO directs the following action:
- Regulatory Action: HHS is directed to propose rules to impose MFN pricing and consider permitting drug importation.
- Antitrust Enforcement: The attorney general and Federal Trade Commission are directed to undertake antitrust enforcement action as appropriate.
- Export of Pharmaceuticals: The Secretary of Commerce and other relevant agencies are directed to review and take action on rules regarding the export of pharmaceuticals or the components of pharmaceuticals.
- Review Drug Approvals: The Commissioner of the US Food and Drug Administration is directed to review and potentially modify or revoke approvals for drugs that may be unsafe, ineffective, or improperly marketed.
- Global Pricing: Agency heads are directed to take all action available to address what the EO calls “global freeloading and price discrimination against American patients.”
Potential Impacts on Group Health Plans
It is unclear how the relevant agencies will implement the EO’s proposed actions, and there are likely to be legal challenges to many aspects of the EO and, potentially, subsequent guidance. However, if fully executed, the EO could present both opportunities and challenges for employer-sponsored group health plans:
- Lower Prescription Drug Costs: Group health plans could see prescription benefit managers reduce prices of certain prescription drugs, including very-high-cost drugs such as specialty medications for GLP-1s, cancer, hemophilia, and arthritis. In addition, there may be new avenues to import drugs from other counties in order to access cheaper prescription drugs that have the potential to save money.
- Increased Prescription Drug Utilization: Lower costs could result in participants filling more prescriptions that they may not otherwise, which would increase overall prescription drug spend for the plan, but could also improve participants’ health outcomes.
- Plan Design Changes: Plan designs would likely need to be modified to align with MFN pricing, any imported drug availability or restrictions, or direct-to-consumer purchasing options. These plan design changes will need to be timely communicated to participants.
Next Steps for Plan Sponsors
Plan sponsors should monitor future regulatory guidance regarding MFN price targets and any other guidance targeting enforcement of anticompetitive practices that may affect their benefit programs. For more information, please contact the authors of this blog or your Morgan Lewis contacts.