Trump Asks Drugmakers to Cut U.S. Prices – 60 Day Deadline
Trump Demands Drugmakers Offer “Most-Favored-nation” prices to Americans, Citing “Free Ride” by Other Nations
Washington D.C. – President Trump issued a stern ultimatum to the pharmaceutical industry on Thursday, demanding that drugmakers provide American families with immediate relief from “vastly inflated drug prices” by adopting a “most-favored-nation” pricing model. The move, outlined in a series of letters to leading drug manufacturers, signals a significant escalation in the management’s efforts to tackle the high cost of prescription drugs in the United States.
Shares of major pharmaceutical companies saw a sharp decline following the declaration, with Bristol Myers Squibb and Novo nordisk dropping nearly 5%, GSK and Merck’s stocks falling more than 3%, and Sanofi tumbling over 8%.
In his correspondence, Trump criticized the industry’s previous proposals, stating they “promised more of the same: shifting blame and requesting policy changes that would result in billions of dollars in handouts to the industry.” He asserted that moving forward, he would only except commitments that offer “immediate relief” and an end to what he described as the “free ride of American innovation by European and other developed nations.” The President emphasized that a collaborative approach to lowering U.S. drug prices would be the “most effective path” for companies, the government, and patients alike.
The President outlined four key steps he expects pharmaceutical companies to take:
Worldwide Most-Favored-Nation Pricing for Medicaid: Drugmakers are called upon to offer their entire portfolio of existing medicines at the lowest price available in other developed nations – the “most-favored-nation” price – to every single Medicaid patient.
Most-Favored-Nation Pricing for Medicare, Medicaid, and Commercial Payers: Companies must contract with the U.S. government to guarantee that Medicare, Medicaid, and commercial payers receive most-favored-nation prices on all new drugs upon their launch and moving forward.
Negotiate Harder with ”Foreign Freeloading Nations”: Trump urged companies to negotiate more aggressively with countries he characterized as ”foreign freeloading nations,” pledging that U.S. trade policy would support these efforts.Increased revenues generated abroad, he stated, must be “repatriated to lower drug prices” for American patients and taxpayers through a U.S. agreement. Direct-to-Consumer/Business Sales: The President requested that drugmakers adopt models selling their medicines directly to consumers or businesses, thereby eliminating middlemen and ensuring all Americans receive the same most-favored-nation prices offered to third-party payers.
The pharmaceutical industry’s primary lobbying group, PhRMA, voiced strong opposition to the proposed measures. Alex Schriver, senior vice president of PhRMA, warned that “importing foreign price controls would undermine American leadership, hurting patients and workers.” The group argued that to reduce price disparities with other countries, U.S.officials should instead “rein in health care middlemen driving up costs for Americans and get foreign countries to pay their fair share for innovative medicines,” referring to pharmacy benefit managers,insurers,and other payers.
In separate statements, spokespeople for Pfizer, Novo Nordisk, and Novartis indicated their commitment to finding solutions for drug accessibility and affordability. Pfizer described its discussions with the Trump administration and Congress as ”productive,” while Novartis stated it is indeed reviewing the President’s letter.
This announcement follows closely on the heels of AstraZeneca’s recent proposal of price cuts for certain drugs in the U.S., which the Trump administration is reportedly considering. AstraZeneca also indicated it is indeed exploring direct-to-patient sales for some medications, a strategy being adopted by companies like Eli Lilly, Novo Nordisk, Pfizer, and Bristol Myers Squibb as Americans grapple with the high cost of prescription drugs. The pharmaceutical sector is also anticipating potential tariffs on imported pharmaceuticals, adding to the pressure on the industry.