On Thursday, September 18, 2025, former President Donald Trump announced that the United States will impose tariffs on pharmaceutical imports to pressure other countries into agreeing to a drug pricing plan. This plan is designed to reduce the high cost of prescription drugs for American consumers by aligning prices with those paid internationally.
Trump stated that the tariffs would serve as a negotiating tool to ensure that foreign countries accept the most-favored-nation (MFN) pricing model, which requires drug manufacturers to offer the U.S. prices no higher than those offered to other developed nations. The announcement was made during a public statement covered by StreetInsider.
The MFN pricing initiative is part of a broader effort by the Trump administration to address the rising costs of prescription medications in the U.S. Earlier in 2025, Trump issued executive orders directing federal agencies to implement reforms targeting drug pricing transparency and competition, including the removal of penalties in Medicare drug negotiation programs and encouraging direct sales from manufacturers to patients.
Trump's approach includes sending letters to leading pharmaceutical manufacturers outlining steps to reduce drug prices to match the lowest prices in developed countries. These steps include providing MFN prices to Medicaid patients, prohibiting better prices abroad for new drugs, and allowing manufacturers to bypass intermediaries to sell directly to consumers at competitive prices.
The tariffs, which Trump indicated could reach up to 250% on imported pharmaceutical products, are intended to support manufacturers in raising prices internationally, with the expectation that increased foreign revenues will be reinvested to lower prices for American patients.
The administration has set a compliance deadline of September 29, 2025, for manufacturers to meet these requirements. Failure to comply could result in the federal government deploying all available tools to protect American families from high drug prices.
While the executive actions have stirred debate, questions remain about the legal authority to enforce MFN pricing without Congressional approval and how manufacturers will respond. Some companies, such as Eli Lilly, have already adjusted their European drug prices in response to these policies.
Congressional support for the MFN pricing approach appears limited, with some legislative proposals stalled in the Senate. The Trump administration continues to push for these reforms as part of its broader agenda to lower prescription drug costs in the United States.
