The order directs the U.S. trade representative and the U.S. secretary of commerce to stop foreign countries from driving up U.S. prescription drug prices.

The attorney general and the head of the Federal Trade Commission are supposed to make the new executive order work together with the drug cost reduction executive order Trump signed April 15, according to the fact sheet.

The Trump administration as a whole is supposed to "communicate price targets to pharmaceutical manufacturers to establish that America, the largest purchaser and funder of prescription drugs in the world, gets the best deal."

If Kennedy has a hard time setting up a most-favored-national mechanism using existing laws and regulations, the order directs him to "take other aggressive measures to significantly reduce the cost of prescription drugs to the American consumer and end anti-competitive practices."

The U.S. history: Trump tried to add a most-favored-nation pricing system to the Medicare Part B program, which pays for drugs received from physicians and in outpatient hospital settings, during his first term in office,

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Opponents sued in court to block the Medicare Part B most-favored-nation pricing strategy, and the administration of former President Joe Biden rescinded it.

The backdrop: Manufacturers charge U.S. patients only about half as much for generic drugs as they charge patients in a group of nations that includes Canada, France, Germany, Italy, Japan, Mexico and the United Kingdom, but they charge U.S. patients about four times as much for brand-name drugs, according to a paper by Margaret Kyle, an economics professor at the Center for Industrial Economics in Paris, that appears in the current issue of the Journal of Economic Perspectives.

Kyle notes that the most-favor-nation pricing strategy is a version of the "external reference pricing strategy," or "name your price" strategy, popularized by the Priceline website.

European countries that have tried most-favored-nation strategies have found that manufacturers gamed the system by making the products introduced in different countries more difficult to compare or by using secret rebates to hide what they are really charging in each country, Kyle writes.

"When (true) prices are secret, a manufacturer can more easily lower its price in a country, because it sees no negative consequences from having that secret price referenced by other countries," Kyle says. "In concentrated markets, transparent prices could also facilitate collusion by manufacturers."

But Kyle says some strategies could work differently in the United States than in Europe simply because the U.S. pharmaceutical market is such a big, attractive market for pharmaceutical manufacturers.