President Donald Trump signed a sweeping executive order Monday designed to lower prescription drug costs by tying federal reimbursement rates to the lowest prices paid by other developed nations. The move revives the “Most Favored Nation” (MFN) model first introduced during his first term and blocked by legal challenges in 2020.
This time, the policy comes with broader scope and stronger legal footing—and early praise from some unlikely corners.
“There has never been a president in my lifetime more willing to take on the pharmaceutical oligarchs than Donald Trump. He’s not just talking about it—he’s doing it. This executive order is going to save lives, lower costs, and put American patients first,” said Health and Human Services Secretary Robert F. Kennedy Jr. at the press conference unveiling the order.
What the Order Does—and Doesn’t Do
The order instructs the Department of Health and Human Services (HHS) to notify drug manufacturers of MFN pricing targets within 30 days. If negotiations fail, the federal government will implement direct enforcement. It applies initially to drugs under Medicare Part B and Medicaid but is expected to ripple into private markets through pricing realignments.
The order also opens the door to direct-to-consumer sales at MFN prices, allowing manufacturers to bypass insurance middlemen entirely—particularly pharmacy benefit managers (PBMs), whom the administration blames for distorting drug prices.
Critically, the order doesn’t regulate private insurance or out-of-pocket prices directly. But by shifting the largest drug purchaser in the U.S.—the federal government—to MFN pricing, it could force private payers and hospital systems to adapt.
Vermont Could See Immediate Impact
For Vermont, where hospital-administered drugs like Avastin have been at the center of reimbursement disputes, the MFN model could be transformative. In one 2024 case, Blue Cross refused to reimburse UVM Medical Center nearly $40,000 for a cancer drug that costs less than $5,000 on the open market.
With Medicare and Medicaid now targeting global benchmark prices, hospitals may see revenue compression on high-cost infused drugs, and insurers may gain leverage to demand parity in negotiations. This would undercut the very pricing battles that led to the creation of Vermont’s controversial H.482 bill.
H.482: A Solution to a Disappearing Problem?
H.482, currently awaiting a Senate floor vote, gives the Green Mountain Care Board (GMCB) emergency authority to cut hospital reimbursement rates if a domestic insurer triggers a solvency warning. It also allows the Board to install independent “observers” inside hospitals deemed financially noncompliant—a power set to sunset in 2030.
Supporters argue it’s necessary to prevent a financial crisis like the one Blue Cross cited last year. But with federal MFN enforcement now underway, the assumptions underpinning H.482 may already be outdated.
There’s growing concern that enacting H.482 now could unintentionally trigger overlapping regulation, conflicting mandates, or state-level price controls that collide with federal reforms.
What Did Vermont’s Federal Delegation Do Last Time?
In 2020, when Trump issued a nearly identical MFN order, it was blocked in court. The Biden administration then rescinded it entirely in 2022. During that period, Vermont’s three congressional delegates—Senator Bernie Sanders, then-Rep. Peter Welch, and now-Rep. Becca Balint—did not publicly challenge the rescission or advocate for reinstating the rule.
Today, Sanders has offered guarded praise but no action, stating that more legislation is needed. Welch has introduced a new bill to cap U.S. drug prices at the international average, and Balint has not issued a statement.
Will They Work With the Trump Administration This Time?
Observers are now asking whether Vermont’s delegation will set aside partisan rhetoric and engage with the administration to implement the MFN policy successfully.
So far, Sanders has continued to denounce oligarchs while taking no direct legislative action to support this pricing model—leading some critics to call him a “Blamogarch”: always blaming, rarely delivering. Meanwhile, Balint, who frequently criticizes Republican initiatives while offering few concrete alternatives, risks solidifying her image as a “Yellagarch”—a vocal presence with little policy follow-through.
Only Welch has taken measurable steps, introducing new legislation similar to the MFN concept just days before Trump’s order.
A Chance to Stabilize Medicare?
If implemented successfully, MFN pricing could lead to major savings for federal programs—particularly Medicare, which is facing long-term funding pressures. Experts suggest that widespread adoption of MFN rates could shave tens of billions from the Medicare drug budget and extend the program’s solvency.
That puts the stakes of this policy shift into sharp focus—not just for national politics, but for state policymaking as well.
As H.482 inches toward a vote in Montpelier, lawmakers must now weigh whether Vermont is about to layer new bureaucracy onto a problem already being dismantled by federal reform—or whether it’s time to hit pause and let the dust settle.
Dave Soulia | FYIVT
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