MFN Policy Executive Order: What It Means for Pricing, Distribution, and Biopharma Strategy

On May 12, 2025, President Trump signed an executive order with the potential to significantly change the U.S. drug pricing and distribution system. Here is what we know about the Administration’s new Most Favored Nation (MFN) policy:

  • During a press appearance, President Trump indicated that the new drug pricing policy— potentially linking U.S. drug prices to those in other countries—should result in discounts of 59–80%, possibly up to 90%.
  • The impact of MFN will vary based on which countries are selected as comparators, which drugs are included, and the formula used to calculate the U.S. price. Past proposals have referenced an average across an identified basket of countries.
  • To avoid the implementation of MFN, the Administration will communicate prices to pharmaceutical companies within 30 days, who will then sell directly to patients at that price. Per the White House press release, HHS will establish a mechanism for this to occur, bypassing “middlemen.”
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Strategic Considerations for Manufacturers

There is a lot to think about in this current proposal, despite not yet knowing all the details. According to the order, the new prices must be available to patients within six months. Although the timing of this new regime may be delayed, the implementation of a change is highly likely. In order for a manufacturer to comply, here are some things to consider:

A New Pathway for Drug Distribution

Direct-to-patient distribution represents a significant shift. Pharmaceutical companies’ trade, distribution, and legal teams should be all hands-on deck. Contracts with U.S. stakeholders—insurers, PBMs, and GPOs—will likely need to be revised. New contracts—perhaps with dispensing pharmacies directly—will be needed.

Prescriber Education Will Be Critical

Prescribers must be educated to understand the patient’s new reality. Absent a wholesale shift to “pharm-to-table,” at least some of the many entities currently involved between the provider and patient will likely still play a role in accessing prescribed drugs. However, services that may fall through the cracks include:

  • Adverse event and adherence education
  • Recognition of financial assistance needs
  • Identification of contraindications from concurrent therapies and co-morbidities
Payer-Level Pricing Evaluations Are Needed

The impact of an MFN-style change in pricing should be evaluated at the payer level. For example, significant rebates currently available in Medicaid may result in a lower price than the assigned or MFN price. Systems will need to be updated, and government contracting and pricing teams will need to understand the new rules to ensure appropriate pricing, rebating, and compliance to avoid penalties.

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Planning for MFN Starts Now

This new pricing edict is set to reshape how drugs are priced, reimbursed, and accessed—and manufacturers that act now will be better positioned to respond.

Magnolia Market Access is ready to help you:

Quantify your portfolio’s exposure using real-world claims data across U.S. and global markets

Evaluate policy and payer mix implications to identify risks and growth opportunities

Pressure-test pricing and contracting strategies before new rules take hold

Ensure patient continuity with support strategies tailored to evolving distribution models

New drug pricing policies are coming. Let’s make sure you’re ready for what’s next.

Let’s talk.

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