The news: The Trump administration added new details to its plan to lower US prescription drug costs by matching global prices, as a bipartisan Congressional effort for similar legislation gets underway.

Unpacking the news: The Department of Health & Human Services (HHS) wants pharma companies to drop their US drug prices to match the lowest prices in peer countries, defined on Tuesday as those in an Organization for Economic Co-operations Development country with at least 60% of the US GDP per capita. The HHS guidance now specifies that it applies only to brand drugs that don’t have any generic or biosimilar competitors.

HHS Secretary Robert F. Kennedy Jr. will lead negotiations with pharma companies and recently renewed warnings to manufacturers to cooperate or face consequences. The initial order laid out aggressive enforcement possibilities, including investigating drugmakers for anti-competitive practices and reviewing their marketing claims if the two sides don’t make progress.

Why it matters: President Trump tried to enact a most-favored-nation executive order during his first term, but his proposal was challenged by biopharma trade groups in court and ultimately lost.

However, this time, support is growing in Congress. Rep. Ro Khanna (D-CA) last week introduced the “Most Favored Nation Act” to codify Trump’s order. Republican Reps. Anna Paulina Luna and Andy Biggs have signed on as co-sponsors, per The Hill.

Yes, and: Meanwhile, Congressional representatives in the House and Senate have introduced companion bills to eliminate pharma companies’ advertising tax deductions. Both “No Handouts for Drug Advertisements Act” bills are bipartisan, led in the House by Rep. Greg Murphy (R-NC) and in the Senate by Josh Hawley (R-MO) and Jeanne Shaheen (D-NH).

The bottom line for pharma: The Trump administration claims that global price-setting will save US consumers between 30% and 80% on drug prices. Meanwhile, eliminating pharma advertising tax deductions could add $1.5 billion to $1.7 billion in federal tax revenues, according to Campaign for Sustainable Rx Pricing.

But some in the pharma industry are pushing back. Roche said if the most-favored nation plan goes into effect, it may not be able to deliver on its US investment promises. In April, Roche promised $50 billion in new US pharma manufacturing and R&D, following pledges by Novartis, Eli Lilly, and Johnson & Johnson for US investments amid Trump drug tariff threats.

Our take: Previous most-favored-nation pricing and ad tax deduction proposals have failed, but there are two major differences this time that could be game-changers—Congress’ appetite for legislation and willingness of the Trump administration to play hardball by threatening enforcement for noncompliance. Pharma and biotech companies may need to decide soon whether to negotiate or fight back in court.

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