This week, President Donald Trump revived one of the most ill-conceived health policy ideas of his first term.
Via a new executive order, he's directed his administration to deliver "most-favored-nation prescription drug pricing to American patients."
The idea is to bring other developed countries' lower drug prices to the United States — by jawboning pharmaceutical companies into complying or taking some sort of administrative action to forcibly cap prices if they won't.
The order is a distraction.
The president can't bring about lower drug prices by fiat.
Even if he could, importing foreign countries' prescription-drug price controls would gut important, timely medical research — and ensure that fewer novel therapies are developed in the future.
President Trump first tried to implement most-favored-nation drug pricing in 2020.
That bid directed that the federal government would pay the lowest price among economically advanced nations for certain medications through Medicare Part B, the segment of the program which covers outpatient care.
The policy was proposed as a "demonstration" — that is, as a pilot program designed to test an experimental policy.
It never got off the ground.
Why?
The courts struck it down, and the Biden administration later pulled the proposal altogether.
(President Biden implemented drug price controls of his own in August 2022 by signing the Inflation Reduction Act into law.
The first of those controls take effect for 10 drugs dispensed through Medicare's Part D prescription drug benefit in January 2026.)
The president's latest executive order goes further than his first-term proposal.
It's not limited to Medicare Part B, or even to public-sector health programs.
Drug companies would be required to sell their medicines at most-favored-nation prices across the entire U.S. health sector.
The order instructs the administration to provide price targets to drugmakers within 30 days. And it suggests a variety of measures the government might take should the industry fail to meet the president's demands — including the importation of medicines from abroad.
As the president sees it, this sweeping proposal will help "address global freeloading and price discrimination against American patients."
There's no denying that American patients pay more for prescription drugs than other wealthy nations.
Foreign countries free ride on the research and development that Americans underwrite by paying higher prices for drugs.
Our leaders should take steps to compel the rest of the developed world to pick up a bigger share of the cost of medical innovation.
The executive order nods in that direction by instructing the Secretaries of Commerce and the U.S. Trade Representative "to ensure foreign countries are not engaged in any act, policy, or practice . . . that has the effect of forcing American patients to pay for a disproportionate amount of global pharmaceutical research and development."
But it's inconsistent even counter-productive — to decry the foreign price controls that have created this inequity in R&D investment and simultaneously base U.S. prices on them.
Drug companies will respond to price controls by ratcheting down their research budgets. After all, it takes $2.6 billion and more than a decade, on average, to bring a drug from inception to market. And roughly nine in ten drug candidates fail clinical trials.
Investors won't fund such expensive, uncertain efforts if the fruits will be subject to price controls.
There are also legal implications to consider.
The Inflation Reduction Act bars the federal government from using a metric known as quality-adjusted life years, or QALYs, under Medicare's existing scheme of price controls.
QALYs are a measure of how many healthy years a particular medicine can be expected to add to a patient's life.
They have long been used by foreign governments as a justification for denying patients access to life-saving medicine for cost reasons.
By importing drug price controls from these very countries — as a most-favored-nation policy would — the president would be smuggling in a technique for rationing medical care that lawmakers have banned.
Most-favored-nation pricing won't put an end to foreign freeloading.
It will, however, chill medical progress while introducing massive new risks, costs, and complications to a thriving domestic industry.
If the president really wants to put American patients first, he should consider putting this executive order back in the drawer from which it came.
Sally C. Pipes is President, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is "The World's Medicine Chest: How America Achieved Pharmaceutical Supremacy — and How to Keep It" (Encounter 2025). Follow her on X @sallypipes. Read Sally Pipes' Reports — More Here.
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