Trump Calls on Pharma to Lower Drug Prices for Americans

President Trump has reached out to the leaders of seventeen major pharmaceutical companies, urging them to take immediate action to lower prescription drug costs.

The White House confirmed these communications, which were sent to major players like Eli Lilly, Sanofi, Regeneron, Merck & Co, Johnson & Johnson, and AstraZeneca. Copies of the letters were subsequently published by Trump on his Truth Social platform.

Central to President Trump’s demands is a call for lower-income individuals to benefit more from the “best drug price” guarantee. He also expects companies to introduce new medications at their lowest possible price from the outset.

Moreover, any additional profits earned overseas should be returned to American patients and taxpayers, according to Trump’s spokeswoman, Karoline Leavitt. The pharmaceutical companies have been given a deadline of September 29th to respond.

Reducing drug prices has been a significant focus for President Trump,who signed a related executive order in mid-May. The pharmaceutical industry largely dictates medication costs in the U.S., with limited government influence on these pricing decisions.

What is the “most favored nation” (MFN) approach too drug pricing, and how does it aim to lower costs for American consumers?

The “Most Favored Nation” Approach to Drug Pricing

Former President Donald Trump has recently reiterated his calls for pharmaceutical companies to lower drug prices for American consumers.A key component of his strategy centers around a “most favored nation” (MFN) approach to Medicare drug pricing. This policy aims to tie the prices paid for certain drugs in the U.S. to the lower prices paid by other developed countries.

Essentially, the U.S. would onyl pay a price for a drug that is no higher then what other nations are already paying. This concept has been a recurring theme throughout Trump’s political career, resurfacing in July 2025 wiht renewed emphasis.

understanding the Price Disparity: Why Are US drug Prices higher?

Several factors contribute to the significantly higher cost of prescription drugs in the United States compared to other nations. These include:

Lack of Government Negotiation: Unlike many countries, the U.S. government, until recently with the Inflation Reduction Act, was largely prohibited from directly negotiating drug prices with pharmaceutical companies for medicare.

Patent Protection & Market Exclusivity: Pharmaceutical companies are granted patents that provide exclusive rights to manufacture and sell a drug for a specific period. This allows them to set prices without competition.

Direct-to-Consumer advertising: The U.S. and New Zealand are the only developed countries that allow direct-to-consumer advertising of prescription drugs, driving up demand and potentially prices.

Complex Supply Chain: The pharmaceutical supply chain is intricate, involving manufacturers, wholesalers, pharmacy benefit managers (PBMs), and pharmacies, each adding their margin.

trump’s Recent Claims and Scrutiny

Trump recently claimed a potential 1500% reduction in drug prices,a statement that immediately drew criticism and fact-checking. According to reporting from nj.com,the claim appears to be based on a misrepresentation of the potential savings from the MFN approach.While the MFN model could lead to lower prices, a 1500% reduction is widely considered an exaggeration.

The core idea remains: leverage the purchasing power of the U.S. to secure better deals on prescription medications. this is particularly relevant for high-cost drugs used to treat chronic conditions like diabetes, heart disease, and cancer.

How the “Most Favored Nation” Rule Would Work

The proposed MFN rule, as envisioned by Trump, would function by:

1. Identifying Drugs: Selecting specific drugs covered under Medicare Part B (typically administered in a doctor’s office) for price negotiation.
2. Determining the Reference Price: Establishing a “most favored nation” price based on the lowest price paid for the drug in a select group of other countries.
3. Implementing the Price: Medicare would reimburse providers based on this lower, MFN price.

Impact on Pharmaceutical companies and Innovation

The implementation of an MFN rule, or similar price controls, raises concerns about the potential impact on pharmaceutical innovation.

Reduced Revenue: Lower prices could reduce pharmaceutical companies’ revenue, potentially impacting their ability to invest in research and development (R&D) for new drugs.

Shift in R&D Focus: Companies might prioritize developing drugs for markets where they can command higher prices.

Potential Drug Shortages: In some cases, manufacturers might choose to discontinue production of drugs with low profit margins.

However,proponents argue that the current system already incentivizes prioritizing profitable drugs over those addressing unmet medical needs. They believe that a more equitable pricing system could encourage innovation focused on genuine patient benefit rather than maximizing profits.

The Inflation Reduction Act and Current Drug Price Negotiations

It’s crucial to note that the landscape of drug pricing is already evolving. The Inflation Reduction Act of 2022 authorized medicare to negotiate prices for a limited number of high-cost drugs, starting in 2026. This represents a meaningful shift in U.S. policy and a move towards greater government involvement in drug price regulation.

key provisions of the Inflation Reduction Act:

Medicare Drug Price Negotiation: allows Medicare to negotiate prices for select drugs covered under Part B and Part D.

Inflation Rebates: Requires drug manufacturers to pay rebates to Medicare if drug prices increase faster than inflation.

Out-of-Pocket cost Caps: Caps out-of-pocket prescription drug costs for Medicare beneficiaries at $2,000 per year.

Resources for Lowering Prescription Drug Costs

Nonetheless of policy changes, several resources are available to help Americans lower their prescription drug costs:

GoodRx: A website and app that compares drug prices at different pharmacies.

SingleCare: Similar to GoodRx, offering coupons and discounts on prescriptions.

manufacturer Assistance Programs: many pharmaceutical companies offer patient assistance programs to help individuals with limited income afford their medications.

Generic Drugs: opting for generic versions of drugs can significantly reduce costs.

* Medicare Part D Extra Help: A programme that helps low-income individuals pay for their Medicare prescription drug coverage.