President Trump’s method for cutting prescription drug prices is now under scrutiny as he’s required to adhere to his “most preferred country” pricing plan, potentially facing unspecified repercussions from the federal government.
He is expected to respond to drug manufacturers by September 29th, citing a Presidential Order aimed at lowering drug prices for Americans and taxpayers.
This order mandates manufacturers to prioritize pricing for all Medicaid patients. It requires that they offer better prices to other developed nations for new drugs, sell directly to consumers, and utilize trade policies to adjust international pricing while ensuring revenues are reinvested into reducing U.S. prices.
Trump communicated his stance to drug manufacturers, stating, “The only thing I’ll accept in the future is my commitment to delivering immediate relief from exorbitant drug prices and countering the limitations imposed by other developed nations.”
If they are uncooperative, the order implies that the federal government will “use all available resources to safeguard American families from exploitative pricing practices in the pharmaceutical sector.”
Letters from Trump have been sent to various companies, including Abbvie, Amgen, Astrazeneca, and Johnson & Johnson, among others.
Pharmaceutical Companies’ Initial Reactions
Inquiries were made to all 17 companies mentioned by the Trump administration for their feedback.
Some companies seem to be aligning with the executive order. For instance, drugmakers like Eli Lilly, Novo Nordisk, Bristol Myers Squibb, and Pfizer have initiated consumer programs for popular medications.
Earlier this month, Bristol-Myers Squibb announced it would introduce a new schizophrenia treatment in the UK, priced equivalently to that in the U.S., right before the FDA’s approval announcement.
When contacted for comments, EMD Serono stated, “Our main goal is to ensure patients worldwide continue to enjoy the benefits of innovation without creating confusion. We’re in close touch with the U.S. administration and will share further details soon.”
Merck commented, “We’re working to elevate foreign prices while lowering those in the U.S., and we’re committed to collaborating with the administration to strike a better balance while ensuring American leadership in biopharmaceutical innovation.”
Novo Nordisk also mentioned it is discussing the order with the authorities, emphasizing its focus on enhancing patient access and affordability.
Steve UBL, the president and CEO of PhRMA, announced a new portal, AmericaSmedicines.com, which will connect patients with manufacturers’ consumer programs.
“As insurance costs continue to climb and coverage narrows, resources for patient support are increasingly essential. This initiative will help mitigate the gaps in insurance coverage and extend our support to countless individuals,” wrote UBL in a Washington Post op-ed.
Among the companies featured on the site are Amgen, Astrazeneca, and others like Gilead and Merck.
Trump’s Increased Threat of Drug Tariffs
The deadline for responses follows closely on the heels of Trump’s introduction of a 100% tariff on medications from companies failing to establish manufacturing operations in the U.S.
This customs regulation is set to take effect on October 1st.
Details surrounding this tariff plan remain sparse, but industry experts believe it could act as leverage for price reductions from drug manufacturers.
Like previous agreements with the European Union, it’s likely that many countries will be exempted from these new tariff stipulations.
“The specifics are crucial here,” noted Monica Gorman, managing director of Crowell Global Advisors and a former Biden advisor. “It seems the President might consider exemptions for companies building new factories in the U.S. However, the implementation of such measures can be complicated.”
Gorman also highlighted the lack of distinction in existing tariff codes between branded and generic drugs.
White House Re-evaluates the “Global Benchmark” Plan
Shortly before the deadline for businesses to respond, the Trump administration presented new regulations under the Department of Health and Human Services (HHS) related to the “Global Benchmark for Efficient Drug Pricing (GLOBE) Model,” though specifics are still awaited.
Two lobbyists for drug manufacturers indicated to Reuters that these rules would likely mirror Trump’s previous directives.
The administration had projected that this initiative would save Medicaid beneficiaries nearly $30 billion in out-of-pocket expenses over seven years.
However, the Trump administration currently favors a voluntary framework to reduce medication prices.
Earlier this year, FDA Commissioner Marty McCurry and CMS administrator Mehmet Oz promoted a collaborative approach with industry stakeholders.
“Partnering with the industry presents a solid starting point for improvement, and we trust the sector to act appropriately when called upon,” they stated.
By showcasing which companies adhere to proper reforms, they believe it strengthens their stance for future collaboration and accountability.
