PFIZER AGREEMENT ESTABLISHES MOST-FAVORED-NATION PRICING UNDER EXECUTIVE ORDER 14297

WHAT DOES THE PFIZER MOST-FAVORED-NATION AGREEMENT MEAN FOR U.S. TRADE POLICY?
On September 30, 2025, the White House announced an agreement with Pfizer establishing the first application of most-favored-nation (MFN) pricing to U.S. pharmaceuticals. The policy is based on Executive Order 14297, signed May 12, 2025, “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” Under the agreement, Pfizer will align certain U.S. drug prices with the lowest levels paid among comparable nations and repatriate a portion of foreign revenue.
The policy introduces trade-related principles such as reciprocity and revenue repatriation into a domestic pricing framework administered through federal trade and health agencies.
HOW DOES THE PFIZER AGREEMENT FUNCTION WITHIN U.S. TRADE AND INDUSTRIAL POLICY?
The MFN framework applies established trade concepts to pharmaceutical pricing oversight. It operates through two primary mechanisms: a tariff grace period and a repatriation requirement. Participating manufacturers receive a temporary suspension of certain import tariffs while providing documentation of reinvestment or capital transfer into U.S. operations. Repatriated funds are recorded under existing domestic tax and financial reporting standards.
HOW DOES THE POLICY AFFECT TARIFF ADMINISTRATION AND TRADE COMPLIANCE?

Although MFN pricing does not fall directly under U.S. Customs and Border Protection’s tariff authority, it interacts with trade compliance structures that regulate valuation, origin, and transfer pricing. Importers and logistics providers supporting pharmaceutical operations are subject to documentation procedures, foreign trade zone utilization, and tariff classification for active pharmaceutical ingredients (APIs) and related components.

The agreement provides Pfizer with a three-year tariff grace period on specific pharmaceutical imports. According to official statements, the measure is administered through existing trade compliance channels and subject to verification of domestic investment activity.

Stay up-to-date on freight news with Green’s Weekly Freight Market Update by following us on LinkedIn. For continuous updates, make sure to check out our website at greenworldwide.com.

share this information

Go to Top