Trump signs ‘most favored nation’ executive order to slash drug costs; Sanofi, Takeda pledge mega investments in US

By PharmaCompass

2025-05-15

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The US President Donald Trump’s dramatic intervention in pharmaceutical pricing took centerstage as the White House unveiled a sweeping “most favored nation” executive order aimed at slashing US prescription drug costs by up to 90 percent. The directive, which links American drug prices to the lowest costs paid in other developed nations, sent ripples through healthcare markets.

More drugmakers decided to invest in the US to avoid import tariffs. While Takeda announced the investment of US$ 30 billion in the US over the next five years, Sanofi said it will invest “at least” US$ 20 billion until 2030.

In deals, Novo Nordisk signed a potential US$ 2.2 billion collaboration and licensing deal with American biotech Septerna to develop oral small molecule medicines for obesity, type 2 diabetes and other cardio-metabolic diseases. And GSK bought Boston Pharmaceuticals’ late stage investigational liver disease drug for up to US$ 2 billion.

In approvals, the US Food and Drug Administration (FDA) approved AbbVie’s drug Emrelis, an antibody-drug conjugate (ADC) that treats a type of lung cancer in patients who have received previous treatment. The agency also okayed Merck’s cancer drug — Welireg — to treat two rare types of adrenal gland tumors, and granted accelerated approval to Verastem’s ovarian cancer med.

In trials, Johnson & Johnson’s oral psoriasis drug icotrokinra demonstrated remarkable efficacy, potentially establishing a new standard of care in the category. The week also brought setbacks, as GSK and iTeos Therapeutics abandoned their once-promising US$ 625 million TIGIT cancer immunotherapy program after disappointing clinical results.

Trump signs ‘most favored nation’ executive order to slash drug costs by up to 90%

Donald Trump signed a sweeping executive order aimed at cutting US prescription drug prices by linking them to the lowest costs paid in other developed nations. The order directs pharmaceutical companies to meet these “most favored nation” (MFN) price targets within 30 days or face federal penalties, including tariffs and import controls.

This MFN directive allows drugmakers to directly sell their therapies to patients at lower cost, thereby curbing anti-competitive practices followed by pharmacy benefit managers (PBMs). The news sparked a PBM selloff. White House officials estimate the initiative could cut drug costs by up to 90 percent, saving American patients and taxpayers billions of dollars annually.

Experts say more bark than bite: Legal experts caution that an executive order cannot unilaterally override statutes governing Medicare and private-sector contracts, making the plan vulnerable to courtroom challenges reminiscent of earlier attempts struck down by federal judges. PhRMA and other industry groups derided the policy as “socialized medicine,” warning that rushed implementation could disrupt supply chains and stifle innovation.

Weight-loss drugs singled out: Trump specifically singled out high-profile weight-loss drugs such as Novo  Nordisk’s Wegovy (semaglutide) and Eli  Lilly ’s Zepbound (tirzepatide), demanding manufacturers slash their prices. During the signing ceremony, Trump recounted a conversation with a “highly neurotic, brilliant businessman” friend who is “seriously overweight”. The said friend apparently told Trump he paid only US$ 88 in London for a “fat drug”, while paying US$ 1,300 in New York.

Takeda, Sanofi pledge US$ 30 bn, US$ 20 bn investments respectively in US

After companies like Johnson & Johnson, Eli Lilly, Novartis, Roche, BMS and Gilead, this week Takeda Pharmaceutical and Sanofi announced billions of dollars in investment in the US to avoid import tariffs. While Takeda said it will invest US$ 30  billion in its US operations over the next five years, Sanofi said it will invest “at least” US$ 20 billion in the country through 2030.

Sanofi said its investment includes “a significant increase” in R&D spending and “billions of dollars” allocated for US manufacturing.

FDA grants accelerated approval to Verastem’s ovarian cancer drug

FDA has granted accelerated approval to Verastem’s Avmapki Fakzynja Co-pack, a dual oral therapy for adults with KRAS‑mutated recurrent low‑grade serous ovarian cancer (LGSOC). This novel regimen combines two inhibitors — avutometinib and defactinib — to disrupt critical signaling pathways that fuel tumor growth.

AbbVie’s Emrelis gets FDA’s accelerated nod for advanced lung cancer

FDA has okayed AbbVie’s drug — Emrelis (telisotuzumab vedotin-tllv) — to treat adults with a type of lung cancer who have received previous treatment. Emrelis is an ADC — i.e. it belongs to a class of drugs that targets only cancer cells while sparing healthy cells, unlike conventional chemotherapy.

Merck’s cancer drug okayed: The agency also approved the expanded use of Merck’s cancer drug — Welireg (belzutifan) — to treat two rare types of adrenal gland tumors. The two tumor types affect the gland that release the adrenaline hormone, which triggers the body’s defense mechanism.

Novo ties up with Septerna to develop diabetes, obesity medicines

Novo Nordisk has signed a collaboration and licensing deal with American biotech Septerna to develop oral small molecule medicines for obesity, type 2 diabetes and other cardio-metabolic diseases. The deal could bring in US$ 2.2 billion for Septerna.

GSK buys Boston Pharma’s liver disease drug: GSK will acquire efimosfermin, a late-stage investigational drug, from Boston Pharmaceuticals for up to US$ 2 billion. Efimosfermin is a once-monthly subcutaneous injection currently in late-stage clinical trials. It is designed to treat steatotic liver disease (SLD) and metabolic dysfunction-associated steatohepatitis (MASH) — two conditions characterized by fat accumulation and inflammation in the liver.

J&J’s oral psoriasis drug helps patients achieve clear skin, beats BMS’ Sotyktu

Johnson & Johnson’s investigational oral drug, icotrokinra (also known as JNJ-2113), has demonstrated promising results in late-stage clinical trials for moderate-to-severe plaque psoriasis. Icotrokinra is a first-in-class oral peptide that selectively blocks the interleukin-23 (IL-23) receptor, a key driver of inflammation in psoriasis. In head-to-head comparisons, icotrokinra outperformed Bristol Myers Squibb’s oral treatment, Sotyktu (deucravacitinib), in achieving skin clearance and reducing inflammation.

GSK, iTeos scrap lung cancer drug trial: GSK and iTeos Therapeutics have announced the discontinuation of the joint development of their experimental lung cancer therapy, belrestotug, in combination with GSK’s anti-PD-1 antibody, dostarlimab. This decision follows the therapy’s failure to demonstrate a significant improvement in progression-free survival in two mid-stage clinical trials targeting non-small cell lung cancer (NSCLC).

FDA misses target date for GSK’s Nucala to treat COPD: FDA has missed the May 7, 2025, Prescription Drug User Fee Act (PDUFA) target date for a decision on GSK’s application to expand the use of Nucala (mepolizumab) as an add-on maintenance treatment for chronic obstructive pulmonary disease (COPD) with an eosinophilic phenotype. The FDA has not provided a public update regarding the delay or a revised timeline.

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