Trump Admin Threatens Drug Makers With Price Controls
White House Press Secretary Karoline Leavitt announced on Thursday that President Trump had sent 17 letters to pharmaceutical CEOs, demanding lower drug prices and warning that he would “deploy every tool” at his disposal to enforce reductions.
Leavitt read aloud from Trump’s letter to Eli Lilly CEO David Ricks, in which the president vowed to end “global freeloading.” Trump also referenced an executive order he signed in the spring, tackling the issue of pharmaceutical prices.
“This unacceptable burden on American families ends with my administration,” the letter continued.
In the letter, Trump demanded that drug makers who do business in the U.S. take action within 60 days, warning “if you refuse to step up, we’ll deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.”
The letter called to “extend the most favored nation pricing to Medicaid, guarantee most favored nation pricing to newly launched drugs, return increased revenues abroad to American patients and taxpayers, and provide for direct purchasing at most favored nation pricing.”
Leavitt went on to say that Trump “expects to further engage with [the CEOs] immediately in good faith.”
In May, Trump issued an executive order designed to cut prescription drug prices by 30% to 80%, as he announced on Truth Social.
The order also tasked the Department of Health and Human Services with setting price targets within 30 days, but Trump indicated that the ensuing talks between HHS officials and the drugmakers failed to meet his expectations, CNN reported.
“Most proposals my administration has received to ‘resolve’ this critical issue promised more of the same: shifting blame and requesting policy changes that would result in billions of dollars in handouts to industry,” he wrote in the letters, which were posted on Truth Social.
“Moving forward, the only thing I will accept from drug manufacturers is a commitment that provides American families immediate relief from the vastly inflated drug prices and an end to the free ride of American innovation by European and other developed nations,” he added.
The May order also laid out potential penalties for manufacturers that fall short on price cuts: directing HHS to draft implementing regulations; expanding drug importation into the U.S.; reviewing U.S. drug exports; and empowering the FDA to modify or revoke approvals for drugs deemed unsafe, ineffective, or improperly marketed.
Pharmaceutical industry leaders cautioned that Trump’s price-cutting demands could undermine research and development investment—precisely when China is poised to challenge the U.S. for leadership in biopharmaceutical innovation, CNN reported.
“Importing foreign price controls would undermine American leadership, hurting patients and workers,” Alex Schriver, senior vice president at the Pharmaceutical Research and Manufacturers of America, known as PhRMA, told CNN.
“To reduce price differentials with other countries, policymakers should rein in health care middlemen driving up costs for Americans and get foreign countries to pay their fair share for innovative medicines,” Schriver added.
However, Trump lacks both the statutory authority and the regulatory mechanisms to force drugmakers to offer their products at “Most Favored Nation” rates in any market, according to Spencer Perlman, director of health care policy research at Veda Partners, which advises institutional investors and corporations.
Perlman told CNN that the administration could attempt a mandatory trial of such pricing for Medicare and Medicaid through the CMS Innovation Center, but cautioned that this approach would almost certainly face legal challenges.
“He’s trying to put public pressure on pharmaceutical companies to voluntarily do what he does not legally have the authority to make them do,” Meekins told the outlet. “And no pharmaceutical company wants to be the next Harvard University, being targeted with the full power of the United States government against them.”
