Pharmaceutical companies receive correspondence from Trump, focusing on decreases in prescription costs
President Donald Trump has taken a bold step to address the issue of exorbitant pharmaceutical pricing in the U.S. With the signing of an executive order on May 12, 2025, titled "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients," Trump aims to lower the cost of prescription drugs by requiring pharmaceutical companies to match the lowest prices paid by other developed nations for the same drugs[3][4].
Following this order, Trump sent letters to the CEOs of 17 major pharmaceutical companies, including AbbVie, Amgen, AstraZeneca, Eli Lilly, Johnson & Johnson, Pfizer, and others, demanding they reduce drug prices accordingly, with a 60-day deadline to comply[1][2][3]. The letters emphasized that Americans currently pay more than three times the price for brand-name drugs compared to other developed countries[1][2].
The executive order and letters contain several key directives:
- Pharmaceutical manufacturers must provide the most-favored-nation (MFN) price to all Medicaid patients, ensuring Medicaid benefits from the lowest global prices[3].
- Manufacturers are required to not offer better prices in other developed nations than those offered in the U.S. for new drugs[3].
- The order opens the possibility for companies to bypass middlemen by selling directly to patients, but only at or below the best prices seen in developed countries[3].
- The administration plans to use trade policies to encourage companies to raise prices internationally, on the condition that any additional revenue is invested back into further lowering prices for American consumers[3].
- The government warned that if companies refuse to comply, it will use “every tool in our arsenal” to protect American families from abusive pricing practices[3].
Trump framed this initiative as targeting the "unacceptable burden" of drug prices on American families and ending the "free ride of American innovation by European and other developed nations"[2]. This executive order revives a previous Trump administration's MFN drug pricing policy from 2020, which was halted by legal challenges and rescinded by the subsequent Biden administration. The goal now is to cut pharmaceutical costs by as much as 59%, significantly disrupting the existing pharmacy benefit manager system[4].
Trump has publicly shared copies of these letters on his social media platform TRUTH Social to push transparency and accountability[1][2]. The letters were made available to the press following the White House press briefing, where the Health and Human Services Secretary, Robert F. Kennedy Jr., and the Administrator for the Centers for Medicare and Medicaid Services, Dr. Mehmet Oz, were present[5].
In a move to ensure compliance, the letters to the CEOs specifically mention the executive order signed on May 12 and emphasize the urgency of action within the 60-day deadline[1][2]. The companies that received similar letters from Trump include AbbVie, Boehringer Ingelheim, Bristol Myers Squibb, Novartis, Gilead Sciences, Inc., EMD Serono, Pfizer, Novo Nordisk, AstraZeneca, Amgen, Genentech, Johnson & Johnson, GSK, Merck, Regeneron Pharmaceuticals, and Sanofi[6].
Trump's call to action comes as recent data reveals that the prices that Americans have been paying for brand name drugs are more than three times the price other similar, similarly developed nations pay[1][2]. By implementing this executive order, Trump seeks to "stop global freeloading" and guarantee that Americans pay the same prices enjoyed by other developed nations[7].
- The executive order, titled "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients," signed by President Trump on May 12, 2025, aims to lower the cost of prescription drugs by implementing policies that match the lowest prices paid by other developed nations, thus reducing the revenue of pharmaceutical companies.
- In a health-and-wellness-related policy-and-legislation move, Trump sent letters to the CEOs of 17 major pharmaceutical companies, including AbbVie, Amgen, AstraZeneca, Eli Lilly, Johnson & Johnson, Pfizer, and others, requiring them to lower drug prices and comply with the new executive order within 60 days, citing the high cost of prescription drugs as an unacceptable burden on American families.
- In the general news, Trump's initiative to lower pharmaceutical costs aims to disrupt the existing pharmacy benefit manager system and cut costs by as much as 59%, with the goal of ensuring Americans pay the same prices for drugs as those in other developed nations, ending the "free ride of American innovation by European and other developed nations."
