Donald Trump has intensified his campaign to compel major pharmaceutical companies to align their U.S. drug prices with the significantly lower rates available internationally, though industry experts remain largely unconvinced of widespread compliance. This move underscores the ongoing debate within healthcare policy regarding affordability and access.
In recent correspondence to 17 pharmaceutical CEOs, Trump Administration officials outlined specific demands, including the extension of “Most Favored Nation” pricing—the lowest price a drug commands in a peer country—to all drugs for Medicaid Medicare enrollees. He further sought assurances that Medicare, Medicaid, and commercial insurers would secure such favorable pricing for all new medications, issuing a 60-day ultimatum for these changes.
This aggressive directive builds upon an executive order signed in May, which initially called for drugmakers to offer U.S. patients reduced prices or face severe repercussions. The administration highlights that certain brand-name drug prices in the US Politics landscape can be more than three times higher than those in other developed nations, underscoring the urgency of the president’s current push.
The Pharmaceutical Industry, however, has voiced strong concerns that Trump’s demands could significantly impede vital research and development efforts. Organizations like the Pharmaceutical Research and Manufacturers of America (PhRMA) argue that importing foreign price controls would undermine American leadership in biopharmaceuticals, potentially harming both patients and workers.
Experts like Spencer Perlman of Veda Partners assert that the president lacks the direct legal authority to mandate “Most Favored Nation” pricing across all markets. While the administration might attempt to implement a test program through the Centers for Medicare and Medicaid Services’ Innovation Center, such a move would almost certainly face considerable legal challenges.
Consequently, Trump’s current strategy appears to be a concerted effort to exert public pressure on drug manufacturers, encouraging them to voluntarily adopt policies he cannot legally enforce. This approach aims to avoid direct confrontations, but it places companies in a difficult position, akin to being targeted by the full force of the United States government.
The broader implications of this pressure campaign are debated, with some experts suggesting it could lead to higher prices or delayed access to medicines in other countries, while offering little tangible relief to most U.S. patients. A previous attempt by Trump to establish pricing for certain Medicare drugs during his first term was swiftly blocked by federal courts before being rescinded.
Notably, the recent letters represent a more focused approach compared to the initial sweeping executive order, which broadly applied to all drugs in all markets. The current demands are primarily centered on lowering prices within the Medicaid program, benefiting states, and on new drugs across Medicare, Medicaid, and commercial insurance markets.
Beyond price demands, the administration has also explored imposing tariffs on imported pharmaceutical products, a move that experts warn could disrupt the supply chain for certain medications, particularly generics, and potentially lead to further price increases. These multifaceted efforts reflect a persistent push to reshape drug pricing dynamics.
