Trump Sends Letters to 17 Leading Pharma Companies Outlining Most-Favored-Nation Drug Pricing Protocol

United States President Donald Trump has contacted 17 pharmaceutical companies, providing them with the step-by-step process he says they must take to lower prescription drug prices in the US to the lowest price offered among other developed nations (1). This strategy, known as the most-favored-nation (MFN) price, was first detailed by the White House in an executive order signed by Trump on May 12, 2025 (2).

Conversations began after executive order

The companies receiving letters on July 31 were AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly and Company, EMD Serono, Genentech, Gilead Scienes, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi.

According to the White House, following the issuing of the May 12 executive order, the Trump administration began discussions with pharmaceutical manufacturers about ways to achieve MFN pricing in the US. The issuing of the letters is an indication that the administration feels that proposals from the industry have fallen short (1).

Action to be taken within 60 days

A fact sheet summarizing the content of the letters said that the federal government will “deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices” if these companies fail to act (1). The letters set a 60-day timeline for that to be accomplished (3).

The White House lists four main steps it is requesting the 17 companies to take:

• MFN prices must be offered to every Medicaid patient.

• Manufacturers must specify that they will not offer better prices for new drugs to other developed nations than those offered in the US.
• Efforts should be made to eliminate middlemen and sell medicines directly to patients, provided at prices no higher than the best price available in developed nations.
• Raising of international prices should be supported by trade policy, with increased revenues from abroad directly reinvested into lowering prices for Americans.

This apparently imminent shift in US drug pricing policy has wide-ranging potential impacts across the pharmaceutical industry. Here are a few to watch for as this story develops.

Drug discovery and development

The action may introduce substantial uncertainty into historical pricing models previously used to justify high initial launch prices in the US market. Specifically, drug developers pursuing novel therapies with high R&D costs could face additional hurdles in projecting return on investment. Companies may begin to rethink early-stage decisions, including therapeutic areas of focus, prioritization of pipelines, and clinical trial design, especially when working on therapies expected to launch first in the US.

Moreover, the directive to directly reinvest international revenue gains—if global prices increase—into US price reductions could discourage investment in markets with tighter pricing controls, thereby reshaping global clinical trial strategies and potentially delaying drug availability abroad. These tradeoffs could incentivize firms to prioritize assets with clearer pathways to MFN-compliant pricing structures.

Manufacturing and market access challenges

Adapting to MFN pricing may necessitate pharmaceutical companies making fundamental changes to their global pricing and market access strategies. Numerous multinational companies engage in tiered pricing, meaning country-specific prices are negotiated based on local healthcare infrastructure and purchasing power. The proposed MFN policy could undermine this model by disincentivizing offering lower prices abroad unless US prices are also reduced accordingly.

Manufacturing decisions, specially around scale and site selection, may be affected as well, as companies adjust to anticipated changes in demand—particularly if pricing pressures cause shifts in product access or payer coverage. Manufacturers may need to invest in enhanced cost-control measures and supply chain optimization to preserve margins under more uniform, globally benchmarked pricing.

Pressure on margins and models

Eliminating middlemen, such as pharmacy benefit managers, and enabling direct-to-patient sales could disrupt traditional distribution models. For established firms, compliance may require restructuring commercial operations, including patient support programs, channel strategies, and pricing transparency initiatives. Companies may need to invest further in digital infrastructure or third-party partnerships.

For smaller or emerging companies, these demands could increase the financial and logistical barriers to market entry, intensifying the need for strategic alliances with larger firms that possess the operational capacity to meet evolving federal expectations.

Next steps?

The 60-day window issued by the administration presents a relatively short timeframe for manufacturers to respond meaningfully. Firms will likely need to evaluate their current and upcoming pricing agreements globally, analyze the revenue impact of MFN pricing, and consider potential litigation or policy engagement strategies. While the administration has not outlined explicit enforcement mechanisms, the language in the fact sheet suggests the possibility of regulatory or trade-related consequences should manufacturers not comply voluntarily.

Still, this stands to be a potentially transformative moment for pharmaceutical pricing policy in the US. Stakeholders in discovery, development, and manufacturing will need to closely monitor policy developments and prepare for scenarios that may affect global revenue planning, R&D prioritization, and commercial model evolution.

References

1. The White House. Fact Sheet: President Donald J. Trump Announces Actions to Get Americans the Best Prices in the World for Prescription Drugs. WhiteHouse.gov, July 31, 2025.
2. The White House. Fact Sheet: President Donald J. Trump Announces Actions to Put American Patients First by Lowering Drug Prices and Stopping Foreign Free-Riding on American Pharmaceutical Innovation. WhiteHouse.gov, May 12, 2025.
3. Hollan, M. President Trump Issues Letters to 17 Major Pharma Companies Demanding Action on Most-Favored-Nation Order. PharmExec.com, July 31, 2025.