Rising API Tariffs Are Forcing Pharma to Shift R&D Resources
In Part 3 of our interview; Lanton Law speaks with Applied Clinical Trials on the highlights of how tariffs on active pharmaceutical ingredients could affect resources for maintaining and accelerating R&D pipelines.
In Part 3 of our interview; Lanton Law speaks with Applied Clinical Trials on the highlights of how tariffs on active pharmaceutical ingredients could affect resources for maintaining and accelerating R&D pipelines. The interview can be heard here.
Understanding the 2025 Executive Order on Most-Favored-Nation Drug Pricing: Implications for Healthcare Stakeholders
On May 12, 2025, President Trump signed an executive order titled "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients," aiming to align U.S. prescription drug prices with the lowest prices paid by other developed nations.
On May 12, 2025, President Trump signed an executive order titled "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients," aiming to align U.S. prescription drug prices with the lowest prices paid by other developed nations.
Key Provisions:
Most-Favored-Nation (MFN) Pricing: The order mandates that Americans should not pay more for prescription drugs than patients in other developed countries. It directs the Secretary of Health and Human Services (HHS) to establish MFN price targets within 30 days and communicate these to pharmaceutical manufacturers.
Direct-to-Consumer Sales: HHS is instructed to facilitate programs allowing pharmaceutical manufacturers to sell directly to American patients at MFN prices, potentially reducing reliance on intermediaries.
Addressing International Pricing Disparities: The Secretary of Commerce and the U.S. Trade Representative are directed to take action against foreign practices that may contribute to higher drug prices in the U.S., ensuring that American patients do not disproportionately fund global pharmaceutical research and development.
Potential Impact:
While the executive order sets forth ambitious goals to reduce drug prices, its implementation may face challenges, including legal scrutiny and resistance from stakeholders concerned about its impact on innovation and global pricing dynamics. The effectiveness of the order will depend on the specifics of the forthcoming regulations and the responses from pharmaceutical companies and international partners.
Call to Action:
Healthcare providers, insurers, and pharmaceutical companies should closely monitor developments related to this executive order. For a comprehensive analysis of its implications and guidance on navigating the evolving regulatory landscape, contact Lanton Law today.
Trump’s Pharmaceutical Tariffs: A New Operating Era for Healthcare
The Trump administration's recent trade and healthcare policies are poised to introduce significant uncertainty into the U.S. healthcare industry. Two pivotal executive actions—the initiation of a Section 232 national security investigation into pharmaceutical imports and the signing of the executive order titled “Lowering Drug Prices by Once Again Putting Americans First”—highlight the administration's approach.
The Trump administration's recent trade and healthcare policies are poised to introduce significant uncertainty into the U.S. healthcare industry. Two pivotal executive actions—the initiation of a Section 232 national security investigation into pharmaceutical imports and the signing of the executive order titled “Lowering Drug Prices by Once Again Putting Americans First”—highlight the administration's approach.
On April 1, 2025, the Department of Commerce commenced a Section 232 investigation to assess the national security implications of importing pharmaceuticals and their ingredients. This encompasses finished drug products, active pharmaceutical ingredients (APIs), and key starting materials. The investigation aims to determine whether reliance on foreign sources compromises national security, potentially leading to the imposition of tariffs ranging from 10% to 25% on these imports.
Simultaneously, President Trump signed the executive order “Lowering Drug Prices by Once Again Putting Americans First” on April 15, 2025. This order seeks to reduce prescription drug costs by enhancing Medicare drug price negotiations, reinstating discounted insulin programs, and increasing transparency in hospital drug acquisition costs.
While these measures aim to bolster domestic manufacturing and reduce drug prices, they introduce several uncertainties:
Supply Chain Disruptions: Tariffs on imported pharmaceuticals could disrupt existing supply chains, leading to potential shortages and increased costs for healthcare providers and patients.
Regulatory Ambiguity: The executive order lacks detailed implementation plans, leaving stakeholders uncertain about how the policies will be enforced and their practical implications.
Market Volatility: The potential for tariffs and changes in drug pricing regulations may lead to market instability, affecting investment decisions within the pharmaceutical industry.
In this evolving landscape, healthcare entities must navigate the complexities of new trade policies and regulatory reforms. Lanton Law offers expertise in crafting targeted messaging and engaging with policymakers to advocate for client interests. Our team is equipped to assist clients in understanding and responding to these changes effectively. Contact us to learn more.