Navigating the Drug Pricing Shakeup: What the Latest EO Means for Pharma

Just one week after directing agencies to accelerate American-based pharmaceutical manufacturing, President Donald Trump signed another executive order (EO) on May 12, 2025. This EO focused squarely on reducing the cost of prescription drugs for American patients and taxpayers. The two orders reflect a broader shift in U.S. pharmaceutical policy: a movement toward increasing domestic control over both the production and pricing of medicine.

The May 12 EO calls for multiple federal agencies to coordinate on enforcing “most-favored-nation” pricing. This approach would tie the price Americans pay for prescription drugs to the prices paid in comparable foreign countries. It also opens the door to direct purchasing models that could bypass traditional middlemen.

Aiming to Correct Global Price Imbalances

According to the administration, Americans pay significantly more for brand-name drugs than patients in other developed countries. This order takes aim at what it describes as “foreign free-riding”, the practice of other nations paying negotiated, lower prices while U.S. consumers bear a disproportionate share of global pharmaceutical costs.

The order tasks the Secretary of Health and Human Services with:

• Establishing price targets based on international benchmarks

• Creating a mechanism for patients to access medicines directly from manufacturers

• Proposing rule changes to impose price ceilings if manufacturers do not comply

This puts significant pressure on both global pharmaceutical pricing strategies and U.S. market access planning.

What Makes This Executive Order Different?

Unlike previous efforts, this directive explicitly links pricing to trade policy and positions the U.S. government as both regulator and negotiator. It extends beyond Medicare to include Medicaid and outlines additional enforcement tools if pricing goals are not met.

For pharmaceutical companies, this means potential disruptions to list-price strategies, rebate structures, and international pricing coordination. Companies could face a forced realignment of U.S. pricing models, particularly for therapies with limited competition.

Tying It All Together: Manufacturing and Pricing as a Unified Strategy

Taken together, the May 5 and May 12 executive orders represent two sides of the same coin. One addresses where drugs are made; the other, how much they cost. While distinct, both point to a more assertive federal stance on domestic control of pharmaceutical access and affordability.

For pharmaceutical leaders, the message is clear: U.S. policy is shifting on multiple fronts, and commercial, regulatory, and supply chain functions must all be prepared to adapt.

Margins Are Squeezed. But Efficiency Can Be Expanded.

When policies aim to reduce top-line revenue through price pressure, the best countermeasure is controlling the bottom line. While the specifics of implementation are still evolving, organizations can act now to minimize risk. That means reducing inefficiencies, eliminating manual rework, and preparing systems for faster, more accurate regulatory response.

This is especially true now. While profits may be under pressure, companies have a window to make smart investments that will reduce costs over time. And while it may feel risky to spend budget in a period of volatility, the bigger risk may be standing still.

Companies that modernize today, whether through AI, centralized document systems, or automated compliance workflows, are positioning themselves for:

• Reduced cycle times for labeling and submissions

• Fewer errors and regulatory setbacks

• Greater flexibility in how and where they operate

• Adaptability Is the Best Hedge Against Uncertainty

You don’t need to know what the next executive order will say to prepare for it. The direction is clear: more foreign scrutiny and demand for speed and transparency.

Strategic uncertainty isn’t going away. But you can control how ready you are to navigate it.

If your team is reassessing how to adapt systems, reduce costs, and improve regulatory agility, we’re here to help. Contact Glemser today to get started.

Originally published at Glemser.com 

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