On July 24, 2020, President Trump signed Executive Order 13937, which directed the Department of Health and Human Services to implement a Most Favored Nation pricing model for Medicare pharmaceutical purchases. Under this framework, Medicare would be prohibited from paying more for any drug than the lowest price that same medication commanded in other developed nations—essentially pegging American drug costs to international reference pricing. The administration moved swiftly to implement the policy through regulatory channels, with the Centers for Medicare and Medicaid Services finalizing the rule in November 2020, just weeks before the presidential transition.

The policy would have directly affected millions of Medicare beneficiaries and the pharmaceutical supply chain broadly. Seniors relying on expensive medications for conditions like cancer, diabetes, and autoimmune diseases stood to see reduced out-of-pocket costs if the pricing framework had taken hold. Conversely, pharmaceutical manufacturers faced significant revenue impacts, particularly for drugs sold at premium prices in the American market compared to price-controlled European and other developed markets. The economic pressure threatened domestic drug development pipelines and potentially the availability of certain medications.

The MFN approach represented an escalation of Trump administration attempts to reshape healthcare markets through executive action. While earlier efforts like the Title X family planning redirects and regulatory shifts targeted specific program funding, this pharmaceutical pricing initiative aimed at broader market intervention. Notably, the administration's healthcare interventions have shown a pattern of prioritizing immediate market adjustments over established regulatory processes, contrasting sharply with later healthcare actions that emphasized restriction rather than cost control, as seen in the subsequent mifepristone telehealth restrictions and vaccine guidance overhauls.

Federal courts blocked the rule before implementation, citing concerns about the HHS secretary's authority to unilaterally establish pricing models without explicit congressional authorization. Pharmaceutical industry litigation and procedural challenges forestalled the policy's taking effect. Following Trump's departure from office, the Biden administration rescinded Executive Order 13937 entirely in 2021, eliminating the regulatory framework before courts could fully adjudicate its constitutionality. The policy's reversal left unresolved questions about executive power over Medicare pricing that would likely resurface in future administrations.