An Overview of Trump’s Executive Order 14297: Most-Favored-Nation Drug Pricing

June 11, 2025   •   by Leah Nguyen and Nelsie Nelson   in  Compliance Guidance

Tags:

• Executive Order
• Pharmacy Drug Pricing

On May 12, 2025, President Donald Trump signed Executive Order 14297 (EO), titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” This initiative seeks to reduce U.S. prescription drug prices by tying them to the lowest prices paid in other developed nations, using the Most-Favored-Nation (MFN) pricing model.

Key Provisions of the Executive Order

• MFN Pricing Mandate : Drug manufacturers must offer U.S. consumers prices equal to or lower than those paid by comparably developed nations.
• 30-Day Compliance Window : Companies are required to submit revised pricing proposals within 30 days of the Order’s issuance.
• Enforcement Mechanisms : Non-compliance may trigger:
  • Tariffs on pharmaceutical imports
  • Expanded drug importation from compliant countries
  • Broader application of MFN pricing across Medicare, Medicaid, and private insurance markets

Broader Policy Context

The order frames U.S. consumers as unfairly subsidizing global pharmaceutical innovation. According to the administration, Americans fund up to 75% of global pharmaceutical profits despite representing less than 5% of the world’s population. The EO aims to end what it calls “global freeloading” by compelling foreign governments and drugmakers to share the burden of innovation costs more equitably.

Proposed Benefits and Considerations

Benefits

• Lower drug prices for American consumers
• Increased transparency in Pharmacy Benefit Manager (PBM) pricing
• Pressure on pharmaceutical companies to reduce excessive U.S. profit margins

Considerations

• Potential decrease in pharmaceutical research and development investment
• Legal and regulatory obstacles delaying or hindering implementation
• Uncertainty surrounding real-world impacts on medication availability and cost

Industry Perspectives

• Pharmaceutical Companies: Strongly oppose the order, citing risks to innovation and potential violations of intellectual property rights.
• PBMs: Support transparency goals but warn of increased administrative complexity.
• Retail Pharmacies: Hope for lower acquisition costs but fear supply chain disruptions and market stability.
• Healthcare Providers: Support affordability but express concern over drug availability and quality fluctuations.

Potential Impact

• Pharmaceutical Industry: Increased market volatility, reduced research and development investment in high-risk areas, and potential restructuring of global pricing strategies.
• Employer Plan Sponsors: Improved PBM transparency could lead to smarter benefit design and cost savings.
• Consumers: Potential for significant savings, though benefits may be delayed by litigation and regulatory hurdles.

Employer Takeaways

The EO does not impose immediate obligations on employer sponsored health plans. That said, employers should closely monitor ongoing regulatory developments related to Executive Order 14297, as changes could significantly impact pharmacy benefit structures and overall healthcare costs. Sequoia will continue to monitor this information closely and will communicate updates on further legislative and regulatory developments.

Additional Resources

• Executive Order: Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients

Connect with a Sequoia consultant to learn how Sequoia’s compliance services are integrated in our benefits services and tailored solutions. And if you’re already a Sequoia client, stay on top of your employer obligations with your Compliance Checklist that highlights important compliance dates, action items, and resources.

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog. © 2025 Sequoia Consulting Group. All Rights Reserved.

Leah Nguyen  — Leah is a Compliance Client Consultant for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Leah enjoys spending time with her family, reading books and exploring different farmers markets.

Nelsie Nelson  — Nelsie is a licensed pharmacist with over 10 years of experience as a national pharmacy practice leader in pharmacy benefit management. She currently serves as Sequoia’s national Director of Pharmacy. Her areas of expertise are broad including: innovative pharmacy strategic leadership, industry leading clinical insights & recommendations and procurement & vendor implementation & management. She’s passionate and accomplished about balancing plan sponsor cost reduction with exceptional member benefit experience.