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Timely insights from the Economy, Strategy & Finance Center
The US administration has issued several executive orders (EOs) related to the nation’s pharmaceutical supply creating a trifecta of challenges for drug companies regarding pricing, onshoring, and tariffs. The most recent EO on May 12 seeks to lower the price of prescription drugs in the US by implementing a “most favored nation” (MFN) pricing requirement.
The order directs the Secretary of Health and Human Services to communicate price targets to pharmaceutical manufacturers within 30 days to bring US drug prices in line with comparably developed nations.
Separately, there is another EO directing the industry to increase US manufacturing and an in-process US Department of Commerce investigation, which is expected to result in tariffs on pharmaceuticals. The confluence of these factors has been called a “worst-case scenario” for the global pharmaceutical industry.
Why it matters: Price increases and supply chain disruptions are increasingly likely
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