Donald Trump’s trade record is a lightning rod for debate, marked by aggressive tariffs, strained alliances and a retreat from multilateral agreements under the banner of “America First.” 

Yet, in his second term, one initiative related to trade stands out as an opportunity: the most favored nation (MFN) drug pricing executive order. The order borrows a core trade principle to tackle a pressing domestic issue: prescription drug affordability. Paired with legislative action, it could mark a meaningful step toward lasting healthcare reform.

In international trade, MFN status ensures a country receives the same favorable terms as a nation’s “most favored” partner. Trump’s initiative adapts this principle to healthcare, aiming to ensure Americans pay no more for certain prescription drugs than the lowest price charged to other developed nations.

Americans pay vastly more than their counterparts overseas. In 2022, U.S. prices for drugs were 278 percent higher than in 33 Organisation for Economic Cooperation and Development countries, and for brand-name drugs, 422 percent higher. In 2019, the United States spent $1,126 per capita on prescribed medicines, while peer countries averaged $552.

The executive order directs the Department of Health and Human Services and the Centers for Medicare & Medicaid Services to set price targets based on the lowest rates in OECD countries with a per-capita GDP of at least 60 percent of the United States. The logic is simple: Americans should not subsidize lower drug prices abroad by paying inflated costs at home.

For decades, U.S. consumers have faced the world’s highest drug prices partly because Medicare has been barred from negotiating directly for most drugs. Pegging U.S. prices to those in Germany, Canada or Japan would address this distortion and appeal to basic fairness.

The MFN order goes beyond symbolism. HHS identified brand-name drugs without generic competition and instructed manufacturers to offer MFN pricing to American patients.

Seventeen major drugmakers received letters directing compliance for new drug launches and high-volume products. The order also explores direct-to-consumer and direct-to-business distribution models to reduce costs.

For enforcement, it authorizes multiple tools: rulemaking, FDA importation waivers, potential revocation of drug approvals, and trade actions via the Commerce Department and the U.S. trade representative. Savings of 30 percent to 80% percent were projected for affected drugs, among the most significant potential reductions in U.S. drug costs.

Still, executive orders have weaknesses. They can be rescinded or struck down if lacking statutory authority. Trump’s MFN order in 2020 was blocked by a federal judge and rescinded under President Joe Biden. Without congressional backing, the 2025 revival faces similar vulnerabilities. Legal challenges from the pharmaceutical industry are likely.

For MFN drug pricing to endure, Congress should codify it and provide a clear legal framework. Legislation should specify which drugs are included and set transparent criteria for reference countries; give HHS authority to penalize noncompliant manufacturers; require public disclosure of reference prices and savings realized; and align MFN pricing with efforts to close loopholes.

Codification would reduce uncertainty, encourage long-term compliance and shield the policy from political reversal. Without it, MFN pricing risks becoming a short-lived negotiating tactic.

Prescription drug affordability unites voters across the political spectrum. Polls consistently show bipartisan support for aggressive price-cutting, even at the expense of confronting pharmaceutical interests. The MFN initiative taps into this consensus, promising direct savings for Americans.

Implementation challenges exist. Drugmakers are mounting a campaign to resist MFN pricing and shape the narrative on U.S. drug costs. Recent Senate hearings featured CEOs from Bristol Myers Squibb, Johnson & Johnson and Merck emphasizing the effect of intermediaries in the supply chain. PhRMA, the industry’s lobbying group, has amplified that message. While these arguments shift attention away from manufacturer pricing practices, the root of high U.S. costs, they also underscore why a clear framework is necessary.

Another concern is that manufacturers might raise prices elsewhere to offset cuts in the United States, and foreign governments might object to being used as benchmarks. Eli Lilly’s recent decision to raise United Kingdom list prices for its weight-loss drug Mounjaro —from 122 pounds to 330 pounds — illustrates this. 

The company framed the move as balancing international pricing pressures, but it did not announce U.S. price reductions. The episode highlights how global strategies can complicate efforts to deliver savings for American patients.

The MFN drug pricing initiative is a pragmatic effort that adapts a trade principle to address a critical domestic problem. By ensuring Americans pay no more for lifesaving medications than citizens of other wealthy nations, it tackles one of healthcare’s most glaring inequities. The order is an important start — but its longevity and effectiveness hinge on legislative action. 

Without Congress enshrining it in law, the initiative risks unraveling under legal or political pressure. Congress has a chance to transform a trade-inspired concept into an enduring healthcare reform.

It should seize it.