Sunita Somvanshi
The White House launched two major pharmaceutical policy initiatives in May 2025: bringing drug manufacturing back to US soil and implementing price controls on prescription medications.
The Manufacturing Strategy
The May 5th executive order aims to cut the 5-10 year timeline currently needed to build pharmaceutical plants in the US. The FDA, EPA, and Army Corps of Engineers must streamline their facility approval processes within 180 days.
Key Changes:
- FDA will reduce duplicate requirements for inspecting new facilities
- EPA becomes lead agency for environmental permits
- Foreign plants face higher inspection fees
- Early technical guidance before facilities open
- Simplified rules for moving production from overseas
“Importing foreign prices from socialist countries would be a bad deal for American patients and workers,” says Stephen J. Ubl, PhRMA’s president. “It would mean less treatments and cures and would jeopardize the hundreds of billions our member companies are planning to invest in America.”
The Price Control Push
The May 12th order gives drug companies 30 days to voluntarily lower US prices. If they refuse, the government will tie Medicare/Medicaid drug prices to the lowest rates in other developed nations – the “most favored nation” approach.
“We’re going to equalize,” President Trump stated. “We’re all going to pay the same. We’re going to pay what Europe pays.”
Health law expert Rachel Sachs from Washington University notes: “It really does seem the plan is to ask manufacturers to voluntarily lower their prices to some point, which is not known. If they do not lower their prices to the desired point, HHS shall take other actions with a very long timeline, some of which could potentially, years in the future, lower drug prices.”
Market Response:
- Merck, which made $64.2 billion in 2024, saw stock rise 3.9%
- Pfizer, with $63.6 billion revenue in 2024, rose 2.5%
- Gilead Sciences gained 5.8%
The mild market reaction suggests investors see limited near-term impact.
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Industry Pushback
“John F. Crowley, Biotechnology Innovation Organization president, called the pricing plan “a deeply flawed proposal that would devastate our nation’s small- and mid-size biotech companies.”John F. Crowley, Biotechnology
“Patients and families are not a bargaining chip in a trade war, but that’s exactly how they are being treated – first through proposed tariffs on our nation’s medicines, now with foreign reference pricing in the name of fairness,” Crowley added.
Alan Sager, Boston University health policy professor, counters that research funding could work differently: “Given the president’s apparent public vacillation on many topics, it just isn’t clear that he’ll stay with this problem or that he’ll be willing and able to act effectively.”
Implementation Team
Key officials leading the changes:
- Robert F. Kennedy Jr. – Health Secretary
- Dr. Mehmet Oz – Medicare/Medicaid Administrator
- Dr. Marty Makary – FDA Commissioner
- Jay Bhattacharya – National Institutes of Health Director
The policies face likely court challenges. A similar 2020 price control attempt was blocked by courts. The Inflation Reduction Act of 2022 granted Medicare new drug price negotiation powers.
Senate Majority Leader John Thune noted the price control policy would be “fairly controversial” if attempted through Congress rather than executive order.
For now, both manufacturing reform and price controls remain works in progress, with their real impact yet to be determined.
