President Trump signed two executive orders in the last few months aimed at reducing prescription drug costs and addressing drug pricing strategies. On April 15, 2025, he signed an executive order titled “Lowering Drug Prices by Once Again Putting Americans First” in an effort to deliver on campaign promises to reduce the cost of prescription drugs stretching back to his first term in office.Executive Order 14273, “Lowering Drug Prices by Once Again Putting Americans First” (April 15, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/04/lowering-drug-prices-by-once-again-putting-americans-first/. While the executive order is not particularly lengthy, it addresses 12 substantive areas related to drug pricing that may have an outsized impact on the biopharmaceutical industry. On May 12, 2025, the president reiterated his intent to use drug importation and anti-competition tools to help bring down the cost of drugs in the US in a second executive order, “Delivering Most-Favored Nation Prescription Drug Pricing to American Patients.”Executive Order 14297, “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” (May 12, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients/.
Of particular interest are the sections that implicate the US Food and Drug Administration (FDA), including sections related to reviving the Section 804 drug importation program (commonly known as “SIP”) and accelerating the approval of generics and biosimilars as lower cost alternatives to brand name drugs and biologics.
The US Congress has also expressed a renewed interest in addressing the activities of pharmaceutical manufacturers that it perceives as anti-competitive or abusive. Thus far in 2025, the Senate Judiciary Committee under Senator Charles Grassley has proposed at least five pieces of legislation intended to accelerate generic drug and biosimilar approvals, increase competition, and limit perceived anti-competitive abuses within the biopharmaceutical industry.“Senate Judiciary Committee Advances Grassley-Led Bills to Lower Prescription Drug Prices” (April 3, 2025), available at https://www.judiciary.senate.gov/press/rep/releases/senate-judiciary-committee-advances-grassley-led-bills-to-lower-prescription-drug-prices. Many of these proposals identify FDA as a key stakeholder in achieving Congress’s goals.
In this Alert, we examine pertinent provisions of the executive orders and recently proposed federal legislation with respect to their impact on FDA activities. We identify key issues and concerns emanating from Washington policymaking that pharmaceutical manufacturers should consider in the coming year with respect to FDA and drug approvals and pricing.
On April 15, 2025, the White House released an executive order (“Lowering Drug Prices by Once Again Putting Americans First”) identifying initiatives of the Trump administration to address ongoing concerns about the high cost of prescription drugs. The cost of drugs has been on the public’s mind, and thus a bipartisan issue, across the last two administrations. Below we discuss select provisions of the order that directly impact FDA.
Section 10 states:
“Sec. 10. Increasing Prescription Drug Importation to Lower Prices. Within 90 days of the date of this order, the Secretary, through the Commissioner of Food and Drugs, shall take steps to streamline and improve the Importation Program under section 804 of the Federal Food, Drug, and Cosmetic Act to make it easier for States to obtain approval without sacrificing safety or quality.”Executive Order 14273, “Lowering Drug Prices by Once Again Putting Americans First” (April 15, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/04/lowering-drug-prices-by-once-again-putting-americans-first/.
The concept of importing lower cost drugs into the United States has existed for over two decades. Section 10, with its 90-day timeline, highlights the Trump administration’s desire for FDA to expedite and streamline implementation. As explained below, challenges endemic to the existing process have historically made it difficult for anyone to implement an importation program. Recent activity by Florida and a handful of other states, coupled with this executive order directing FDA to improve the SIP process may change that.
The ‘‘Medicare Prescription Drug, Improvement, and Modernization Act of 2003’’ outlined the requirements of Section 804 of the Food, Drug and Cosmetics Act to allow for the importation of eligible prescription drugs from Canada by pharmacists and wholesalers in certain circumstances, including directing the Secretary of the Department of Health and Human Services (HHS) to promulgate implementing regulations.21 U.S.C. § 384. The law also allows the HHS Secretary to grant individuals, by regulation or on a case-by-case basis, a waiver allowing importation of certain drugs or devices for personal use on such conditions as the Secretary determines to be appropriate. As a condition precedent, Section 804 shall become effective only if the Secretary first certifies to Congress that implementation will: (1) pose no additional risk to the public’s health and safety, and (2) result in a significant reduction in the cost of covered products to the American consumer.Id. at § 384(l).
Multiple presidential administrations largely ignored these pathways until October 2020 when President Trump acted to issue initial regulations under his first administration’s initiative to lower the cost of prescription drugs.21 C.F.R. § 251. Under the regulations, a state or Indian tribe that regulates wholesale drug distribution and the practice of pharmacy may serve in the first instance as a Section 804 Importation Program Sponsor (SIP Sponsor) to implement a program to import drugs from Canada. The SIP Sponsors may delegate certain activities to wholesalers or pharmacists who serve as co-sponsors and who may, over time, become sponsors in their own right. President Biden then issued Executive Order 14035 in 2021 in support of SIP, demonstrating some bipartisan support for reducing drug prices consistent with growing public concern over healthcare, and particularly prescription drug, costs.
A handful of states including Colorado, Maine, New Mexico, and New HampshireColorado amended its SIP submission to the FDA twice in 2024, once on February 27, 2024, and again on August 28, 2024. FDA does not appear to have approved this amended submission. In addition, Maine, New Mexico, and New Hampshire have also submitted SIP proposals to FDA in the past. Vermont and Texas have enacted state bills authorizing the development of their own proposals and Vermont has submitted a proposal to HHS and the Office of Management and Budget. See https://www.ncsl.org/health/state-drug-wholesale-importation-programs. sought to use the SIP process, but only one thus far (Florida) has proceeded through the first step. Florida initially submitted its SIP to FDA in November 2020 and, after various amendments to its application, received FDA authorization in January 2024. Florida’s progress then appeared to stall at the second step of the process, approval of its Pre-importation Request in compliance with SIP rules. As the deadline on the Pre-Importation Request approached, the Biden administration took steps to preserve the opportunity. In a December 20, 2024, letter, Sandi L. Verbois, Director of the Office of Drug Security, Integrity, and Response at FDA, “granted an extension of Florida’s Agency for Health Care Administration’s existing SIP authorization (21 CFR 251.4), for an additional period of six months (i.e., until July 6, 2025)” with the possibility of an additional extension if FDA is notified of such need by May 6, 2025.“Letter of Authorization for Florida’s Section 804 Importation Program,” (Dec. 20, 2024), available at https://www.fda.gov/media/184646/download. At this time, no actual SIP is in place and no drugs are being imported from Canada under this program.
Less than a month after issuing the April 15, 2025, executive order, President Trump issued a second executive order focused on achieving “most-favored-nation” (MFN) pricing from pharmaceutical companies for US patients (i.e., ensuring that US patients did not pay more than citizens of other developed countries, essentially removing a perceived subsidy from the US to patients elsewhere in the world). Titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” the May 12, 2025, executive order asks pharmaceutical manufacturers to voluntarily provide these MFN reduced prices to US patients. However, it indicates that if progress is not made, then, consistent with applicable law:
“(ii) the Secretary shall consider certification to the Congress that importation under section 804(j) of the Federal Food, Drug, and Cosmetic Act (FDCA) will pose no additional risk to the public’s health and safety and result in a significant reduction in the cost of prescription drugs to the American consumer; and if the Secretary so certifies, then the Commissioner of Food and Drugs shall take action under section 804(j)(2)(B) of the FDCA to describe circumstances under which waivers will be consistently granted to import prescription drugs on a case-by-case basis from developed nations with low-cost prescription drugs;”
The executive order appears to provide that the HHS Secretary will provide a broad certification to Congress that importation meets the prescribed standard (i.e., no additional risk and significant reduction in costs) that will permit FDA to grant waivers allowing personal importation of lower cost drugs from other developed nations on a case-by-case basis. The executive order does not provide details as to timing of these actions, requirements under the waivers, or to what extent this approach can comply with applicable laws.Executive Order 14297, “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” (May 12, 2025), available at https://www.whitehouse.gov/presidential-actions/2025/05/delivering-most-favored-nation-prescription-drug-pricing-to-american-patients/.
The May 12, 2025, executive order was followed by an FDA press release on May 21, 2025, announcing some additional enhancements to the Section 804 pathway for drug importation.FDA News Release, “FDA takes steps to enhance state importation programs to help lower prescription drug prices” (May 21, 2025), available at https://www.fda.gov/news-events/press-announcements/fda-takes-steps-enhance-state-importation-programs-help-lower-prescription-drug-prices. These enhancements include the opportunity for states and Indian tribes to submit a draft proposal for pre-review and to meet with FDA to obtain initial feedback prior to formally submitting a SIP proposal, the creation of a user-friendly toolkit to assist parties with developing proposals, and the provision of options to streamline the required cost savings analysis, including input on information that can be relied on in such analysis. The press release also announced upcoming meetings between FDA and stakeholders to gather feedback on these enhancements and the extent to which they reduce burdens, result in higher quality SIP proposal submissions, and shorten FDA review time.
These two executive orders from the Trump administration thus represent the most significant recent developments related to Section 804.On the FDA website the link to the prior Executive Order 14036, “Promoting Competition in the American Economy,” issued under the Biden administration, has been deactivated (though apparently not officially rescinded). This is not unusual when administrations change and typically does not reflect on the underlying program or subject matter itself.
SIP has faced both internal challenges under the law itself and external challenges that have limited its success. The president’s executive order seeks to address the internal challenges by making SIPs a priority for FDA. How FDA moves forward in light of recent reductions-in-force impacting staffing levels and institutional knowledge, and whether external challenges can be overcome, remains to be seen.
Both the approval standard and the specific technical requirements of the SIP law and regulations create challenges for states seeking to implement SIPs and for FDA seeking to approve them. The process is divided into two major, complex steps: (1) receiving authorization for the SIP from FDA, and (2) receiving approval of a Pre-Importation Request governing the details of the importation under the law’s requirements. These steps are designed so that states can demonstrate how they will oversee the safe importation of drugs, at reduced cost, in accordance with the statutory and regulatory requirements.
As noted, to receive authorization, the HHS Secretary, based on FDA recommendations, must determine that the particular SIP will “pose no additional risk to the public’s health and safety[] and result in a significant reduction in the cost of covered products to the American consumer.”21 U.S.C. § 384; 21 C.F.R. § 251.4(a). This two-part standard, requiring no additional risk and a significant reduction in costs for consumers (as opposed to middlemen or others involved in the supply chain process) has historically been viewed as a “poison pill” by past administrations, creating too high a hurdle for approval of proposed SIPs. This changed when Florida received its SIP authorization in early 2024.
The various technical requirements under the SIP process also raise a series of challenges, potentially limiting the law’s reach and the ability to implement it on a practical level. For example:
While the law’s technical provisions may create obstacles, external challenges to improving the effectiveness of SIP also exist.
First, litigation risk may surface in the US or abroad. In the US, pharmaceutical manufacturers, trade associations, or other stakeholders may seek redress from the courts under the Administrative Procedure Act (APA) or intellectual property laws, particularly in light of Florida’s 2024 SIP authorization and the new focus on SIPs resulting from the two executive orders. An additional factor to consider is potential litigation under Canadian law, particularly given the recent shift in cross-border tensions resulting from tariffs and other recent US foreign policies.
Practical limits on drug importation from Canada also may exist. The US population (340 million people) is over eight times larger than the Canadian population (40 million people) raising the question of whether Canada can supply enough drugs for its own population as well as the US population subject to SIPs. This supply differential also could potentially lead to efforts to import drugs from other countries through Canada via the SIP process, which is a risk the law seeks to avoid through its stringent supply chain and authentication processes. Finally, it is unclear whether Canada will be willing to share its drugs with the US given recent cross-border tensions.
To the extent that SIPs begin to gain a foothold in the United States as a result of these executive orders, FDA’s renewed implementation efforts, and potentially reinvigorated state actions to implement SIPs, manufacturers should monitor whether more states are receiving SIP authorizations from FDA (especially under a potential future waiver program and the enhanced assistance from FDA announced in the May 21, 2025, press release). For SIPs like Florida which do receive authorization, manufacturers should closely monitor state Pre-importation Requests to understand which drugs states are most interested in importing to determine if their own drugs are affected. Lastly, monitoring and/or potentially engaging in legal challenges, whether by individual manufacturers, trade associations or Canadian entities, may also be prudent if the SIP pathway as a means to reduce drug prices continues to be a priority of the administration.
All of these obstacles may also be one reason the Trump administration invoked personal importation in its May 12, 2025, executive order. While any waiver allowing personal importation of products under Section 804(j) still requires the threshold certification in Section 804(l), the terms of importation do not necessarily require compliance with the rigorous standards that apply to SIPs. The HHS Secretary has discretion to impose such conditions as necessary to ensure public safety, but it is not clear from the executive order whether the administration is considering additional controls or what such controls may look like.
Two sections of the April 15, 2025, executive order target acceleration of approval of lower cost drugs in the US: Section 9 and Section 13.
Section 9 states:
“Sec. 9. Accelerating Competition for High-Cost Prescription Drugs. Within 180 days of the date of this order, the Secretary, through the Commissioner of Food and Drugs, shall issue a report providing administrative and legislative recommendations to:
(a) accelerate approval of generics, biosimilars, combination products, and second-in-class brand name medications; and
(b) improve the process through which prescription drugs can be reclassified as over-the-counter medications, including recommendations to optimally identify prescription drugs that can be safely provided to patients over the counter.”
Section 13 states:
“Sec. 13. Combating Anti-Competitive Behavior by Prescription Drug Manufacturers. Within 180 days of the date of this order, the Secretary or his designee shall conduct joint public listening sessions with the appropriate personnel from the Department of Justice, the Department of Commerce, and the Federal Trade Commission and issue a report with recommendations to reduce anti-competitive behavior from pharmaceutical manufacturers.”
These two provisions share a common timeframe — six months — in which FDA, along with the Department of Justice, Department of Commerce, and Federal Trade Commission (FTC), must conduct public listening sessions and develop reports with recommendations for accelerating the approval of lower cost alternative drugs (from generics and biologics to combination, second-in-class and over-the-counter (OTC) products) and reducing perceived anti-competitive behavior by pharmaceutical manufacturers.Various agencies have announced dates for initial listening sessions. See, e.g., https://www.justice.gov/opa/pr/justice-department-and-ftc-host-listening-sessions-lowering-americans-drug-prices-through. These actions must still adhere to the “safe and effective” gold standard of FDA’s approval process.
These two sections trace their provenance to certain earlier policy recommendations and actions of the Trump administration. For example, in 2017 FDA’s Drug Competition Action Plan (known as “DCAP”) focused on improving the generic approval pathway for sponsors, especially with respect to high-cost drugs, including closing loopholes and improving FDA’s own processes and efficiency that caused delays. Under DCAP, final guidance on generic drug labeling in situations in which the reference drug’s labeling is not updated has been issued.See https://www.fda.gov/regulatory-information/search-fda-guidance-documents/revising-anda-labeling-following-revision-rld-labeling-guidance-industry.
Similarly, in 2018, the “American Patients First: The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-pocket Costs,” (also known as the “Drug Pricing Blueprint”) offered various pricing reform approaches such as the promotion of biologics innovation and biosimilars, value-based purchasing options, pricing negotiations, reforms to Part B drug acquisition, site-neutral payment policies, and improvements to the generic drug pathway.
Lastly, the FDA issued a Final Rule, “Additional Conditions for Nonprescription Use,” effective May 27, 2025, that allows more drug products to switch to OTC status via “additional conditions” including by allowing sponsors to provide information beyond what can be provided under Drug Facts Label.89 Fed. Reg. 105288 (Dec. 26, 2025). The effective date of this Final Rule was subject to a delay due to transition between administrations. Implementation of this Final Rule is viewed as a priority of new FDA Commissioner Marty Makary. It also likely serves as an example of the second provision under Section 9 of the executive order related to improving OTC processes by providing pathways beyond the labelling system.
Notably, President Trump reiterated his intent to take action based on these upcoming reports in his May 12, 2025, executive order. The “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” executive order states that if progress is not made voluntarily by pharmaceutical manufacturers to implement MFN, the administration would begin enforcement action against anti-competitive actions by pharmaceutical manufacturers based on the findings of the Section 13 report:
“(iii) following the report issued under section 13 of Executive Order 14273 of April 15, 2025 (Lowering Drug Prices by Once Again Putting Americans First), the Attorney General and the Chairman of the Federal Trade Commission shall, to the extent consistent with law, undertake enforcement action against any anti-competitive practices identified within such report, including through use of sections 1 and 2 of the Sherman Antitrust Act and section 5 of the Federal Trade Commission Act, as appropriate;”
Together President Trump’s executive orders seek to accelerate approaches to lowering the costs of prescription drugs and rely on FDA, along with related agencies, to effectuate important parts of these policies.
While President Trump’s executive orders broadly sweep across several substantive areas, congressional action has focused on perceived anti-competitive behavior by pharmaceutical manufacturers. The Senate Judiciary Committee under Senator Charles Grassley has introduced (or re-introduced) at least five bipartisan bills since March 2025 seeking to ease market entry for lower-cost alternatives to counteract the perceived efforts by manufacturers to delay such entry.“Senate Judiciary Committee Advances Grassley-Led Bills to Lower Prescription Drug Prices” (April 3, 2025), available at https://www.judiciary.senate.gov/press/rep/releases/senate-judiciary-committee-advances-grassley-led-bills-to-lower-prescription-drug-prices.
Two of the bills address well-known activities of manufacturers to use existing processes — FDA’s citizen petitions and features of the US patent system — to their advantage. The bills target activities that Congress views as anti-competitive.
First, the “Stop Significant and Time-wasting Abuse Limiting Legitimate Innovation of New Generics Act,” also known as the “Stop STALLING Act,” seeks to stop pharmaceutical manufacturers from filing so-called “sham” citizen petitions under the FDA citizen petition process.https://www.grassley.senate.gov/imo/media/doc/stop_stalling_-_sil25395.pdf. Introduced by Senators Chuck Grassley, Amy Klobuchar, Dick Durbin, Ted Cruz, Richard Blumenthal, Cory Booker, and Peter Welch on March 24, 2025; previously introduced in 2019, 2020, 2021, and 2023. FDA citizen petitions are an important consumer protection tool in the US public health system allowing any stakeholder to bring issues or concerns to the FDA’s attention. Critics have argued that manufacturers allegedly abuse the system by filing petitions at the last minute, raising dubious claims and/or claims designed to waste FDA’s time and resources (demonstrated by the fact that many petitions are ultimately rejected), all with the purpose of delaying the entry of generic drugs into the market.
The Stop STALLING Act would curb these perceived abuses by granting the FTC authority to bring civil action against parties filing such “sham petitions” and punish these “bad actors” with penalties of up to the greater of $50,000 per calendar day of review or the revenue earned by the seller of the branded product.The bill would also codify a definition of “SHAM” to include such things as (i) the objective unreasonableness of the petition, (ii) a party’s intention to delay approval of a generic or biosimilar product, and (iii) petitions that are part of a series or pattern of conduct. This bill seems to recognize the financial incentive manufacturers experience, where any delay in market entry by generics, even as short as a week, can mean millions of dollars to a branded manufacturer of a drug/biologic with high medical need.
Second, the proposed “Drug Competition Enhancement Act” seeks to prohibit the practice known as “product hopping,”Product hopping may take the form of “hard switches” (when branded drug/biologics manufacturers discontinue or withdraw an application and introduce a follow-on product with patent protection within a certain period relative to generic or biosimilar approval) or “soft switches” (when branded manufacturers take actions that “unfairly disadvantage the listed drug or reference product relative to [a] follow-on product.”) i.e., the reformulation of existing drugs to delay or avoid entry of lower cost alternatives.https://www.judiciary.senate.gov/imo/media/doc/drug_competition_enhancement_act.pdf. Introduced by Senators Chuck Grassley, John Cornyn, Richard Blumenthal, and Dick Durbin on April 10, 2025; not previously introduced. The bill would deem “product hopping” a form of unfair competition subject to enforcement action, although a list of exemptions, exclusions, and justifications would allow certain conduct Congress considers lawful.
If enacted, these bills would increase pressure on pharmaceutical manufacturers to demonstrate to FDA that citizen petitions they bring raise appropriate, justifiable issues and that reformulation strategies are clinically meaningful and appropriate under the exclusions and justifications outlined in the proposed law.
The Senate Judiciary Committee has also introduced three bills that propose changes to patent exclusivity requirements. Notably, these bills may align with Section 2 of President Trump’s executive order which also seeks to tweak the patent system to increase access and lower the cost of prescription drugs:
“Sec. 2. Policy. It is the policy of the United States that Federal health care programs, intellectual property protections, and safety regulations are optimized to provide access to prescription drugs at lower costs to American patients and taxpayers.”
For decades, the patent and licensing framework established by the Hatch-Waxman Act and the BPCIA has been the foundation for the unparalleled, life-enhancing and indeed life-saving pharmaceutical innovation that has taken place in the US. Thirty years after the Hatch-Waxman Act and BPCIA framework was put in place, the very patents that allow innovators to benefit from their inventions and recoup the significant outlay for research, development, and approval — with those returns on investment then funding ongoing research into other treatments and cures — seem to be increasingly viewed as suspect by Congress, as demonstrated by many of the provisions in these bills that, rather ironically, seem to profess a negative view of the patent exclusivity system.
Interestingly, these congressional bills also raise the question of whether reforms to the Hatch-Waxman Act framework would be more appropriate to address drug availability and pricing concerns than some of the latest proposals, such as President Trump’s executive order seeking to open the borders to drug importation.These proposals also raise questions of what it means to be anti-competitive and who has the burden to show that providing something of value to another party can in fact be procompetitive in some circumstances. Whether the president or Congress will address this policy concern also remains to be seen.
The president’s executive orders articulate several new priorities for FDA to implement the administration’s policies, including streamlining the drug importation process, and accelerating the approval of lower cost alternative drugs and biologics and eliminating perceived anti-competitive practices. Congress also is targeting manufacturer practices under existing FDA and patent-exclusivity rubrics that, while focused on anti-competitive behavior typically under the FTC’s jurisdiction, also impact FDA’s drug approval processes and obligations under the Food, Drug and Cosmetics Act, the Hatch-Waxman Act, and other existing laws.
The activities and progress of FDA in achieving these policy objectives is difficult to predict given the many changes in Washington, D.C., this year, including the reduction-in-force reducing both the size of the workforce and potentially key institutional knowledge at FDA, and the articulation of these new priorities for FDA to implement. Progress may be further complicated by President Trump’s Executive Order 14192, “Unleashing Prosperity Through Deregulation,” which requires agencies that seek to promulgate new regulations to identify at least 10 existing regulations to repeal, unless prohibited by applicable law.Executive Order 14192, “Unleashing Prosperity Through Deregulation” (January 31, 2025), available at https://www.federalregister.gov/documents/2025/02/06/2025-02345/unleashing-prosperity-through-deregulation.
Manufacturers may consider monitoring government actions and adjusting strategies and tactics related to importation, market exclusivity, drug/biologic approval, and compliance with anti-competition rules as the impact of implementation of the executive orders and the fate of the congressional bills continues to develop.