Trump urges top drugmakers to cut U.S. prescription drug costs

Affected companies

The move was announced during a press briefing by White House press secretary Karoline Leavitt and then by Trump, who posted all 17 copies on his Truth Social account, addressing the CEOs of the following drug companies:

• AbbVie.
• Amgen.
• AstraZeneca.
• Boehringer Ingelheim.
• Bristol Myers Squibb.
• Eli Lilly.
• EMD Serono.
• Genentech.
• Gilead Sciences.
• GSK.
• Johnson & Johnson.
• Merck, Novartis.
• Novo Nordisk.
• Pfizer.
• Regeneron.
• Sanofi.

Commitment demands

Trump's letter demands the following commitments:

• Adopt MFN pricing for all new drugs. Applies to Medicare, Medicaid and the commercial market.
• Offer MFN rates for high-volume, high-rebate drugs. Available through direct purchasing in the U.S.
• Launch direct-to-consumer sales channels. Cut out middlemen, like pharmacy benefit managers, and match private insurer rates.
• Repatriate excess revenues. Lower prices through formal agreements with the federal government.
• Comply within 60 days of notice. Or face federal action, with Trump pledging to "deploy every tool in [their] arsenal” to curb nationwide price gouging.

Company proposals

Trump said in the letter that none of the proposals suggested by the drug companies to slash high prices have been acceptable, saying most "promised more of the same -- shifting blame and requesting policy changes that would result in billions of dollars in handouts to the industry."

And as a result, the president said he will only accept pricing solutions that give "American families immediate relief from the vastly inflated drug prices and an end to the free ride of American innovation by European and other developed nations."

Industry impacts

Shortly after Trump issued his May executive order (EO), federal health agencies HHS and CMS announced plans to build on the order by targeting the lowest prices among the Organisation for Economic Co-operation and Development countries with a GDP per capita of at least 60% of the U.S.

Designed to lower out-of-pocket costs, this policy push, along with Trump's written notices, could instead backfire. Manufacturers under pressure are now faced with added financial uncertainty, while proposed tariffs and imported pharmaceuticals fees threaten to erode profit margins and disrupt supply chains.

PhRMA has previously stated that MFN is a type of government price-setting regulation that could indirectly affect federal health programs. Others warn that the model's demands could ultimately harm research and development, inadvertently allowing China to overthrow the US in biopharmaceutical leadership.

In his first term, Trump proposed a similar MFN plan limited to Medicare Part B drug pricing. However, courts blocked it after several pharma groups sued, citing the administration's failure to follow standard notice and comment rulemaking procedures.

To offset the financial impact of MFN-based pricing strategies, more companies might bypass traditional avenues and adapt by marketing drugs directly to consumers, like Eli Lilly and Novo Nordisk have done with GLP-1s approved for weight management

Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.