President Donald Trump has issued a 60-day ultimatum to 17 major pharmaceutical companies, demanding that they lower drug prices in the U.S. or face severe consequences.
President Threatens Action Over ‘Abusive Drug Pricing Practices,’ Issues Deadline to Commit
Trump, on Thursday, posted individual letters he sent to companies including AbbVie (NYSE:ABBV), Amgen (NASDAQ:AMGN), AstraZeneca (NASDAQ:AZN), Bristol Myers Squibb (NYSE:BMY), Eli Lilly (NYSE:LLY), Merck (NYSE:MRK), and Pfizer (NYSE:PFE) on his social media platform.
Trump warned that if the companies do not comply, he will use “every tool in our arsenal” to safeguard American families from “continued abusive drug pricing practices.” The companies have been given until September 29 to commit to his goals.
Trump’s letters on Thursday took aim at the drugmakers’ proposed solutions to address high U.S. drug prices, calling them “more of the same: shifting blame and requesting policy changes that would result in billions of dollars in handouts to the industry.”
Trump Pushes for Global Benchmark Pricing, Middleman-Free Drug Sales
Trump urged drugmakers to offer all existing drugs to Medicaid patients at the lowest prices available in other developed countries, adopt most-favored-nation pricing for all new drugs across Medicare, Medicaid, and commercial payers, and push back against "foreign freeloading nations" in pricing negotiations. He also called for direct-to-consumer or business sales models to eliminate middlemen and ensure Americans receive globally competitive prices.
In May, he announced a “most favored nations” policy, requiring pharmaceutical companies to charge U.S. consumers no more than the lowest price they offer for the same drug in any other country. This policy could result in price cuts of up to 80% for some drugs.
U.S.-EU Tariffs, Pharma Pushback Pose Roadblock To US Drug Price Reform
The U.S. pharmaceutical industry is facing significant financial challenges. A new trade deal between the U.S. and the European Union is set to impose a 15% tariff on branded drugs imported from Europe, potentially leading to increased drug prices and restricted access for consumers.
Despite the challenges, some pharmaceutical companies are optimistic about finding solutions to help Americans access and afford the drugs they need. Previously, Pfizer, Novo Nordisk, and Novartis have all stated that they are working on potential solutions, with Pfizer describing its discussions with the Trump administration and Congress as “productive.”
However, the industry’s largest lobbying group, PhRMA, has warned that importing foreign price controls could undermine American leadership, hurting patients and workers. The group has called for U.S. officials to “rein in health care middlemen driving up costs for Americans and get foreign countries to pay their fair share for innovative medicines.”
Price Action: Shares of Novo Nordisk A/S (NYSE:NVO), Merck & Co Inc. and Eli Lilly And Co. declined 5.92%, 4.44% and 2.63%, respectively, during Thursday’s trading session.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
