Executive Order aimed at reducing prescription drug prices could affect prescription drug prices in Canada

On May 12, 2025, President Donald Trump signed an Executive Order (EO) titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” aimed at reducing prescription drug prices for Americans by ensuring they do not pay more than the lowest prices set in other developed nations. This EO could have an effect on drug prices and availability globally, including in Canada.

If Canada is included as a reference country for Most Favoured-Nation pricing, this may lead pharmaceutical companies to raise Canadian drug prices to align with U.S. levels notwithstanding regulatory controls that apply in Canada. The Patented Medicine Prices Review Board (“PMPRB”) is a quasi-judicial body charged with a regulatory mandate to prevent pharmaceutical patentees from charging consumers excessive prices during the statutory monopoly period provided for patented medicines. Should the PMPRB intervene to prevent any price increases in Canada, pharmaceutical companies may withdraw products from the Canadian market, leading to reduced drug availability in the country.

Further, pharmaceutical companies may encounter public and private drug plans asking to negotiate discounts when establishing conditions for listing and reimbursement. In order to increase list prices in Canada while leaving the actual paid-for drug price unchanged, companies may seek to negotiate steeper discounts with the plans. 

DLA Piper (Canada) LLP will be monitoring developments as they arise, including any legal challenges in the coming months to the EO. For more information, please contact the authors.