President Trump issued May 12 an executive order promising “aggressive action” if foreign countries and manufacturers do not lower prices for prescription drugs in the U.S.
Among other things, the EO directs the Office of the U.S. Trade Representative and the Department of Commerce to take “all necessary and appropriate action” to ensure that foreign countries are not engaged in any act, policy, or practice that may be unreasonable or discriminatory or that may impair U.S. national security and that has the effect of forcing U.S. patients to pay for a disproportionate amount of global pharmaceutical research and development, including by suppressing the price of drug products below fair market value in foreign countries.
That language would seem to open the possibility of Section 301 or Section 232 trade actions, which could include the imposition of tariffs or other restrictions on imports from specific countries. The DOC’s Bureau of Industry and Security has already initiated a Section 232 investigation of pharmaceuticals; comments were due by May 7.
The EO also provides for additional actions if “significant progress toward most-favored-nation pricing” for drug products in the U.S. is not made, including (1) allowing consumers to directly import prescription drugs from developed nations with low-cost drugs, (2) considering “all necessary action” (which could include restrictions) on exports of drugs or precursor materials that may be fueling global price discrimination, and (3) possibly revoking approvals for drugs that may be unsafe, ineffective, or improperly marketed.
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