Skyrocketing Medication Costs: Trump Urges Pharmaceutical Firms to Lower Prices - Pharmaceutical firms face intense scrutiny from Trump
===============================================================================
In a renewed push to address the issue of high prescription drug prices in the United States, former President Donald Trump has sent letters to 17 pharmaceutical companies, demanding immediate price cuts and threatening to use "every tool" to protect American families from abusive practices in drug pricing.
This latest move is part of Trump's broader plan to reshape drug pricing policies, which he first addressed during his previous term (2017-2021). The core of this policy is the implementation of Most Favored Nation (MFN) pricing, a strategy that aims to cap U.S. prices at or near the lowest prices paid by comparable Organisation for Economic Co-operation and Development (OECD) countries.
Trump has been critical of the high prices paid by U.S. consumers, arguing that American consumers currently subsidize roughly 75% of pharmaceutical profits worldwide due to higher prices. He has accused pharmaceutical companies of heavily discounting their products in foreign markets, such as Germany and other European Union countries, and making up for the lost revenue with extremely high prices in the U.S.
If implemented, this policy would not only aim to lower drug prices in the U.S., but also force pharmaceutical companies to charge more for their drugs in Europe. Companies like Eli Lilly, Pfizer, Boehringer Ingelheim (Germany), Sanofi (France), Novartis (Switzerland), and GlaxoSmithKline (UK) have received letters from Trump, warning them about abusive practices in drug pricing.
The immediate impact of this policy could be significant price relief for U.S. patients on many popular drugs, potentially lowering out-of-pocket costs and insurance premiums. However, some experts caution that simply tying prices to those in other countries does not address underlying domestic factors that drive U.S. drug costs. These structural issues might limit how much prices can sustainably fall.
Pharmaceutical manufacturers may also face pressure to adjust global pricing and profit models, potentially affecting innovation incentives in the long term. The policy may prompt pharmaceutical companies to reassess global pricing strategies and negotiations with governments.
Success of this policy depends on implementation details, compliance by drug companies, and domestic policy reforms to complement international price alignment. This plan is part of a broader 2025 push to reshape drug pricing policies, including reforming pharmacy benefit managers and Medicare negotiation strategies.
Karoline Leavitt, a spokesperson for Trump, has made statements related to this issue. Resistance from the pharmaceutical industry thwarted Trump's previous plans to lower drug prices in the U.S., but it remains to be seen how this latest push will unfold. The letters were sent from Washington, D.C., the capital of the U.S., and Trump has warned in these letters, but did not specify which tools he meant, on his online service Truth Social.
- The 'Science' division of these pharmaceutical companies might need to reevaluate their research and development strategies, as the implementation of Most Favored Nation (MFN) pricing could impact their profit margins.
- American workers suffering from 'medical-conditions' that require expensive prescription drugs could see significant 'health-and-wellness' improvements due to lower prices, potentially alleviating financial burdens associated with treatment costs.
- The 'finance' sector, particularly the health insurance industry, could witness substantial changes in business operations if drug prices reduce dramatically, affecting their revenue streams and operational expenses.
