The future of Trump's drug pricing plan may run through Congress

One of the drug industry's biggest guardrails against President Trump's "most favored nation" drug pricing plan is the fact that it's less enforceable without the involvement of Congress.Why it matters: Enshrining such a policy in law would be proof of GOP evolution on drug prices — or at least the party's willingness to break with its traditional aversion to government price-setting. It would also likely enable policy changes resulting in deeper reductions in what Americans pay for drugs, potentially slashing manufacturers' revenue and creating global disruption. But for now, Trump isn't asking much from the GOP on drug prices while lawmakers deal with a sweeping overhaul of Medicaid and government spending battles.State of play: Trump issued an executive order this month calling for the U.S. to pay less for drugs than other comparable countries. Last week, Health and Human Services outlined targets manufacturers are expected to hit based on the lowest price in Organization for Economic Cooperation and Development nations with a GDP per capita of at least 60% of the U.S. GDP per capita.Analysts have noted it isn't apparent how the plan would overcome legal hurdles. The EO "lacks a clear legal mechanism for implementation, a positive for the industry," Capstone analysts wrote. "Ultimately, any substantive price-setting beyond the Inflation Reduction Act's Medicare negotiation will be tested in litigation." "To disrupt reimbursement within Medicaid, Medicare Part D, or outside government insurance programs, Capstone believes that the administration would be unable to implement policy without Congress," they added."Notably, we expect the implementation of MFN to require legislation with Trump citing a roll up into an official bill where we believe the industry has more avenues to oppose and with noted internal GOP opposition," wrote a UBS Investment Bank analyst.Flashback: Trump tried to enact a similar most favored nation policy during his first term, but it was halted by the courts after the drug industry sued. The idea was eventually abandoned by the Biden administration. The courts blocked Trump's plan based on how it was implemented, not on the merits itself — "something the administration could relatively easily fix," said Washington University law professor Rachel Sachs. But there were also legal challenges to the underlying policy, and there almost certainly would be again should the executive order ever translate into actual regulation. Going through Congress instead could help avoid at least some such pitfalls, as well as confront some of regulation's operational challenges, Sachs said. "Congress has more authority to legislate for the benefit of a much broader set of Americans, but there are also more veto points in place, including political realities, that would limit Congress' ability to do that," she added.The intrigue: While testifying on the Hill earlier this month, HHS Secretary Robert F. Kennedy Jr. told Sen. Bernie Sanders (I-Vt.) that he "absolutely" would work with him on legislation to lower U.S. drug prices so they're better aligned with what other countries pay, Axios Pro reported.Sanders said Trump's executive order is likely to be thrown out in court, necessitating legislation for lower prices. He and other Democrats recently introduced such legislation.A similar bill was introduced earlier this month — but this one by a bipartisan duo, including GOP Sen. Josh Hawley of Missouri. Reality check: Hawley is the exception among congressional Republicans, not the rule. Though many of pharma's fiercest defenders have retired from Congress, the GOP is still generally hardwired to avoid anything that could be considered price-setting within health care. Recent chatter about including an MFN-for-Medicaid policy in the GOP's reconciliation bill ended up going nowhere. And the Trump administration itself has already passed on the chance to include some kind of MFN-like policy within Medicare drug price negotiation guidance, which also came out last week (but to much less fanfare). The guidance doesn't include any kind of international reference pricing component for negotiated prices that will take effect in 2028.What we're watching: Yes, there's a very strong case for why MFN is going nowhere on the Hill. And yet, stranger things have already happened during Trump's tenure, as the GOP's populist streak overtakes traditional free-market conservatism. "Before the end of this Congress, I feel pretty confident betting that MFN will end up as the law of the land. And as a human consumer of pharma, do I think that's a disaster? Yes," said one former senior GOP Senate aide. "But politically it's a no-brainer."

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