President Donald Trump is sending a strong message to major drugmakers to lower their US prices in line with those in other countries. In letters sent to 17 pharmaceutical company CEOs, Trump demands that they extend “Most Favored Nation” pricing, which is the lowest price paid for a drug in a peer country, to all drugs provided to Medicaid enrollees.
Trump wants the companies to guarantee that Medicaid, Medicare, and commercial-market insurers pay such prices for all new drugs. The president gave the companies 60 days to comply with his demands.
The directive stems from an executive order Trump signed in May, which demanded drugmakers start offering US patients those lower prices or face consequences. Prices for some brand-name drugs in the US are more than three times those in other developed nations, according to the administration.
Industry experts warn that pharmaceutical companies may refuse to comply with Trump’s demands, citing concerns over research and development. The companies claim that China is threatening to overtake the US in biopharmaceutical leadership if they cannot maintain their current pricing structure.
The president’s efforts to establish a “Most Favored Nation” rule for certain drugs in Medicare have faced previous setbacks, including being blocked by federal courts and rescinded by President Joe Biden. However, Trump’s latest demands may put more pressure on the industry.
Under the executive order, pharmaceutical companies could face consequences if they do not make significant progress in lowering prices. These consequences include directing HHS to craft a rule implementing the policy, allowing more drug importation into the US, reviewing drug exports, and modifying or revoking approvals granted for drugs that may be “unsafe, ineffective, or improperly marketed.”
The pharmaceutical industry warns that Trump’s demands could harm research and development, while also suggesting that foreign countries should pay their fair share for innovative medicines.
Source: https://edition.cnn.com/2025/07/31/politics/trump-drug-price-lower-letter