U.S. Drug Price Reform Accelerates: Trump Targets Pharma CEOs in Bold MFN Policy Revival

 

U.S. Drug Price Reform Accelerates: Trump Targets Pharma CEOs in Bold MFN Policy Revival

By Marcus Julius Zanon – Compliance Officer & IP Counsel – TWS IP AI Tool | July 31, 2025

In a move with global implications for pharmaceutical pricing, former President Donald Trump has reignited the debate over prescription drug affordability in the United States. On July 31, 2025, Trump sent formal letters to the CEOs of 17 multinational pharmaceutical giants, demanding immediate action to reduce U.S. drug prices—or face regulatory retaliation.

This political pressure campaign, which references Trump’s “Most Favored Nation” (MFN) pricing doctrine, could redefine global drug pricing models and affect intellectual property enforcement, compliance risks, and licensing strategies worldwide.

What Is the MFN Doctrine?

Trump’s proposal revives a controversial initiative from 2020: linking U.S. drug prices to the lowest rates charged in peer OECD countries, many of which operate under universal healthcare systems. Under the May 2025 Executive Order 14297, the MFN policy aims to:

• Peg U.S. prices to those in nations with at least 60% of U.S. per-capita GDP.
• Impose penalties or bar federal contracts for non-complying companies.
• Leverage IRS oversight and importation schemes to reduce pricing pressures.

Legal Insight: If implemented, this policy could collide with international IP agreements, including TRIPS and bilateral patent/trademark accords. Companies relying on patent term extensions, data exclusivity, and supplementary protection certificates (SPCs) may face challenges in enforcing exclusivity at premium prices.

Who’s on Notice?

The demand letters, reportedly sent to executives at Pfizer, Merck, AstraZeneca, Novo Nordisk, Eli Lilly, and others, included an ultimatum:

“You have 60 days to bring your U.S. drug prices in line with the lowest charged globally, or face our full arsenal of enforcement tools.”

Additional requests include:

• Increasing direct-to-patient affordability measures.
• Transparency in rebates and PBM arrangements.
• Domestic reinvestment of profits earned abroad.

⚖️ Legal, Regulatory, and Compliance Risks

The initiative faces several hurdles:

• Lawsuits from pharmaceutical companies, similar to what halted Trump’s 2020 executive order.
• Constitutional challenges based on separation of powers, federal procurement rules, and international trade obligations.
• Litigation risk management for stakeholders with cross-border operations.

From a compliance and IP licensing perspective, legal teams must now:

• Monitor evolving regulatory frameworks in the U.S., EU, and Brazil.
• Anticipate changes in price control laws and public procurement criteria.
• Evaluate the potential impact on transfer pricing and royalty agreements.

Implications for Brazil and LATAM IP Strategy

Brazilian and Latin American markets may feel the ripple effects in two primary ways:

1. Multinational Compliance Spillover: Firms may shift revenue-generation strategies to LATAM as profit margins in the U.S. shrink. This could increase licensing pressure and local pricing audits.
2. Trademark & Patent Strategy Shifts: Companies may delay or modify filings to avoid triggering MFN pricing references or cross-border litigation.

✅ MJZanon + TWS IP AI Tool will monitor whether this U.S. policy leads to more accelerated oppositions, compulsory licensing debates, or market exclusivity challenges in Brazil’s ANVISA-linked IP framework.

Strategic Forecast

Impact Area	Short-Term Effect	Long-Term Outlook
U.S. Drug Prices	Potential moderate drops	Legal pushback may delay implementation
Patent Licensing	Pressure on royalty margins	New valuation models may emerge
Compliance	Surge in disclosure requirements	Integration of pricing, IP, and tax data
LATAM IP Policy	Minimal initial effect	Risk of “price contagion” in tender markets

Final Takeaway

The Trump administration’s revived MFN strategy may succeed politically, but its legal viability remains uncertain. For pharmaceutical innovators, IP counsel and compliance teams must reassess global pricing structures, contract clauses, and enforcement plans.

We offer continuous monitoring of:h

• Brazilian RPI trademark and patent conflict risks
• Automated compliance assessments for licensing and litigation

Want tailored alerts for your portfolio? Contact us for a personalized regulatory + IP conflict report.

Citation:

Original article: New York Times, July 31, 2025 – “Trump Demands Drugmakers Slash Prices or Face Action”

Legal context and opinion provided by MJZanon IP Compliance Team

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