TL/DR –
Pharmaceutical Executive conducted an MFN-centered webinar featuring discussions on the industry’s reaction to President Trump’s executive order, negotiation tactics, and potential legal challenges. Pfizer has struck a deal with the White House to reduce drug prices and participate in a government-run, DTC pharmaceutical website, and it will be exempt from tariffs for three years if it abides by the deal. Discussions during the webinar touched upon the economic spillovers of drug prices differing by country, the implications of the MFN order and the Inflation Reduction Act on oncology R&D, and potential legal challenges to the MFN order.
Pharmaceutical Executive Continues Discussion on MFN: Industry Reactions and the Future of Drug Pricing
The “Pharmaceutical Executive” webinar series returned on October 8, 2025, for another informative session. After discussing the motivations behind President Trump’s executive order in the first episode, the focus shifted to industry reactions, negotiation tactics, and potential legal challenges. Ron Lanton, Esq, a partner at Lanton Law, moderated the insightful discussion.
The panelists of the episode were Melanie Whittington, PhD, the head of the Center for Pharmacoeconomics at MEDACorp, Stephen Forster, JD, a partner at Jones Day’s Health Care & Life Sciences Practice, and Peter Rubin, the executive director at No Patient Left Behind.
Most Favored Nation Order: Legal Battles, Market Shifts, and the Future of Drug Pricing Reform
The episode opened with Lanton asking about the industry’s reaction to the current status of the Most Favored Nation (MFN) order. He highlighted a recent deal Pfizer struck with the White House, promising to lower drug prices and participate in a government-run, DTC pharmaceutical website. Although the details of the agreement remain private, it was disclosed that Pfizer would be exempt from tariffs for three years if it holds up its end of the bargain.
Lanton invited Whittington to share her views on the deal and its apparent trade-offs.
Whittington: “The word tradeoffs excite me as a health economist. It reveals the significance and value of the biopharmaceutical innovation ecosystem. Any nation would desire to foster biopharmaceutical innovation investment and development, not only for macroeconomic factors like jobs and infrastructure but also for health reasons and access to drugs and clinical trials. While the MFN order was only announced in May, so much has happened. It’s clear that this trade-off exposes macro-level factors beyond the transactional price of the drug.”
Lanton then shifted the discussion to statutory authority and broader reforms. He asked Rubin to delve into how the MFN order aligns with broader drug pricing reform efforts and how it might interact with previous attempts, like the Inflation Reduction Act (IRA).
Rubin: “It’s essential to remember that in practice, manufacturers or innovators overseas have little room to negotiate prices set by foreign governments. The only way to comply with MFN is to lower US prices arbitrarily. Such a move does not necessarily reflect the incentives needed to bring drugs to market over time, particularly considering that 99-out-of-100 drugs fail. Implementing the Inflation Reduction Act’s pill penalty along with importing foreign price controls will negatively impact oncology R&D. I fear that the US’s higher survival rates from cancer will suffer. Layering MFN on top of the pill penalty means fewer promising drugs, especially in oncology, will reach clinical trials, leading to fewer breakthroughs.”
Next, Lanton steered the discussion towards potential legal challenges that the MFN order and subsequent actions might encounter. He asked Forster to speculate on the possible scenarios.
Forster: “If they go to rulemaking, perhaps they’ll face a challenge under the Administrative Procedure Act on procedural grounds. Like the 2020 litigation, there might be claims related to the separation of powers and other constitutional matters. As we proceed, depending on what’s in these proposals, we might see many challenges to HHS Secretary Kennedy’s authority to follow or implement particular types of demonstrations or payment models.”
“They must ensure that whatever they are doing falls within the statutory authority. For example, they can test models specifically for Medicare, Medicaid, and the CHIP program under the Social Security Act, but they can’t go beyond that. It’s going to be whether they have no ability to enforce against commercial plans. How are they going to do that? That’s a big question. What is that going to look like? In almost every contract I’ve ever worked on, I would have put a clause in it covering a change in laws.”
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