Letters from White House Could Push Some Compliance, Broad Agreements Unlikely: Q&A With Kathy Oubre, MS

In the second part of her Q&A, Kathy Oubre, MS, discusses the recent updates surrounding the most favored nation (MFN) executive order, including how the discussion of tariffs might play into drug pricing and the recent letters that President Donald Trump sent to pharmaceutical companies in July to demand more swift action on the executive order.

Read part 1 of this Q&A here!

This transcript has been lightly edited for clarity.

AJMC: How would this executive order affect the affordability of oncology treatment should its contents be implemented? What happens if nothing changes?

Oubre: Implementing the MFN executive order could lower the price of some oncology drugs for American consumers by tying US prices to the lower prices paid by other developed nations. However, the policy's effect on the overall affordability and accessibility of cancer treatment is uncertain.

The MFN executive order, signed in May 2025, directs the HHS to set drug price targets based on the lowest prices paid by a group of comparable countries. While specific outcomes are uncertain, experts project potential consequences for oncology care.

Potential for lower drug prices:

• Direct-to-consumer (DTC) savings: The executive order aims to lower the prices of brand-name, single-source drugs by compelling manufacturers to align with international rates. This would primarily affect high-cost medications for which no generic or biosimilar version exists.
• DTC pilots: While politically attractive, DTC pricing is rarely cheaper than what a patient pays with insurance (especially if they benefit from negotiated rebates, caps, or coinsurance limits). In practice, DTC programs often bypass insurance and expose patients to higher net costs unless they are uninsured or in a high-deductible phase

Potential risks to patient access and care:

• Reduced access to innovative drugs: The Association for Clinical Oncology warns that manufacturers could limit the availability of their drugs in the US if domestic prices are no longer profitable. This would be especially harmful for cancer patients who rely on specific, innovative therapies.
• Provider financial strain: Oncology practices, which must purchase expensive drugs for in-office administration, could face financial hardship. If reimbursement rates are capped at MFN levels but acquisition costs remain higher, these clinics may struggle to remain economically viable.
• Service disruptions: Financial strain on providers could lead to hospital and clinic closures, particularly in rural or underserved areas. This would restrict access to care for vulnerable populations, forcing patients to travel farther for treatment.

Without the implementation of the MFN policy, the current drug pricing system would continue, with several persistent and significant consequences for cancer patients.

• High "financial toxicity": Patients already face "financial toxicity," a situation where the cost of treatment causes significant stress and impacts their quality of life. Out-of-pocket costs can quickly lead to debt or even bankruptcy for patients and their families.
• Delays and discontinuation of care: Due to rising costs, many cancer patients delay or skip their treatments, including not filling prescriptions or taking less than the prescribed dose. This can severely harm their outcomes and reduce survival rates.
• Perpetuation of high prices: The current system allows US drug prices to remain significantly higher than in other developed countries, with manufacturers arguing that higher revenues are needed to fund research and development.

Kathy Oubre, MS

AJMC: Recently, Trump has issued letters to major pharmaceutical companies telling them that the administration plans to use every tool to lower drug prices if they don’t comply. Will these letters encourage pharmaceutical companies to come to an agreement on drug prices?

Oubre: On July 31, 2025, the White House sent letters to 17 major pharmaceutical companies demanding they align with the administration’s MFN drug pricing order. The letters instructed companies to provide MFN prices to Medicaid patients; commit to MFN pricing for newly launched drugs across Medicare, Medicaid, and commercial markets; and participate in DTC pilots at MFN prices for certain high-cost drugs.

The White House also requested manufacturer response with binding commitments by September 29, 2025, or face the administration “using every tool” to force lower prices—including regulatory action, antitrust enforcement, and trade measures.

So, what’s next? The letters could push some compliance for the following reasons:

• Political pressure and reputational risk: Refusing the White House could make manufacturers appear to be blocking affordability reforms at a time of bipartisan focus on drug costs.
• A voluntary concession may be preferable to a binding CMS rulemaking that could impose broader and less favorable cuts.
• For some high-rebate or competitive drugs, the net price is already closer to international levels, so agreeing to small concessions may cost little but gain political goodwill.

However, broad agreements are unlikely because….

• Extending MFN pricing across Medicare, Medicaid, and commercial markets could slash US revenues by 30% to 60% on blockbuster drugs—an outcome drugmakers are unlikely to accept voluntarily.
• If companies give MFN prices to the US, other wealthy nations could demand the same, further compressing margins worldwide.
• The 2020 MFN Part B model was blocked in court for procedural flaws and later rescinded. Manufacturers know a binding rule will almost certainly face lawsuits, so they may choose to stall rather than agree.
• And by resisting now, manufacturers may preserve negotiating leverage for the formal rulemaking phase expected later in 2025–2026.

AJMC: The Trump administration has floated the idea of tariffs being placed on foreign pharmaceuticals, with a potential of up to 250% tariffs. How would this affect the move for “most favored nation” pricing?

Oubre: In 2025, the US Department of Commerce opened a Section 232 investigation into pharmaceuticals and pharmaceutical ingredients (finished drugs, application programming interfaces, key starting materials, and related items). The goal of the investigation is to determine whether imports threaten to impair US national security and recommend remedies (tariffs/quotas).

By regulation, Commerce has up to 270 days from initiation (April 1, 2025) to deliver its report to the President (ie, by late December 2025) though the administration has signaled it may move faster. As of today, no final report has been released publicly.

The administration has publicly floated tariffs as high as 200% to 250% on imported drugs (phased in) as part of its leverage strategy. It’s likely that tariffs would raise, not lower, US drug prices—at least in the near term—because they increase import acquisition costs that flow through to payers and patients, which already suffer from high health care costs.

On August 21, 2025, the US and EU announced a Framework Agreement that directly addresses pharma:

• Beginning September 1, 2025, the US commits to apply only the MFN tariff (ie, no extra duties) to EU-origin generic pharmaceuticals, their ingredients, and chemical precursors.
• For EU goods subject to Section 232 actions (explicitly including pharmaceuticals), the US commits to cap the combined MFN + Section 232 tariff at 15%—far below the previously threatened triple-digit rates.

Many consider the threat of tariffs as leverage, not a sustainable pricing policy.

Note: The Section 232 pharma investigation is ongoing; a final report (due by late December 2025 unless accelerated) will determine whether the President formally imposes remedies. Until then, the US–EU framework limits the tariff shock for EU drugs (MFN-only for EU generics; a 15% cap if any 232 duties apply), while non-EU supply chains remain at risk.