The Most Favored Nation directive would allow drugmakers to directly sell their products to patients at a lower cost, cutting out what President Donald Trump called “the middlemen.”
Stocks of pharmacy benefit managers took a beating after President Donald Trump unveiled his Most Favored Nation (MFN) policy—a move he claims would lower drug prices by at least 50%.
A core tenet of Trump’s MFN directive is enabling “direct-to-consumer” sales of drugs, according to the Executive Order he signed on Monday. “We’re going to cut out the middlemen and facilitate the direct sale of drugs at the most favored nation price directly to the American citizen,” the president said at the executive order signing event at the White House.
“I don’t know who they [the middlemen] are but they’re rich,” Trump said at the event.
This announcement came as a blow to these so-called “middlemen”—pharmacy benefit managers that coordinate between drugmakers and patients. According to reporting from Reuters, shares of CVS Health, which owns CVS Caremark, dropped 5% on the MFN news, while Cigna, parent of PBM Express Scripts, lost 6%. UnitedHealth Group, which owns OptumRx, dipped 0.5%.
Trump’s executive order tasks Health and Human Services Secretary Robert F. Kennedy Jr. with establishing a “mechanism through which” patients can directly source their medicines from manufacturers. It is not clear when Kennedy is expected to implement this mechanism or how he plans to do so.
In a statement to Reuters, Greg Lopes, spokesperson for Pharmaceutical Care Management Association, a trade group representing PBMs, again put the blame of high drug prices on the pharma companies. PBMs, according to Lopes, are the only check to drugmakers’ control over medicine pricing, Reuters reported.
Meanwhile, a spokesperson for CVS, speaking to Reuters, said the company will engage with the government to figure out ways to make drug prices more affordable for patients.
PBMs have long been criticized as a key driving force behind the rise in drug prices. In July 2024, under former chairperson Lina Khan, the Federal Trade Commission released a scathing report detailing how six of the largest players have come to manage some 95% of all prescription drugs in the U.S., in turn hiking their costs.
In January, another report from the FTC found that the three biggest PBMs—CVS Caremark, Express Scripts and OptumRx—inflated drug prices by hundreds and thousands of percents, raising their revenues by $7.3 billion.
PBMs, however, have long maintained that it’s the drugmakers that are at fault for drug prices. In a congressional hearing in July 2024, executives from Caremark, Express Scripts and OptumRx said that pharma companies engage in anti-competitive practices to keep the prices of products high, while PBMs help promote competition.
“Brand products with little to no competition remain the chief source of rising drug costs,” CVS Caremark president David Joyner said at the time.
