Trump orders drug companies to lower prices

President Donald Trump demanded that over a dozen pharmaceutical companies take steps to lower prescription drug prices in the U.S. to match prices in developing countries. The president sent letters to 17 drug companies last week, including GSK, Johnson & Johnson, Merck, Novo Nordisk, and Pfizer, calling on them to “step up” and lower prices. The White House said in a Monday statement that the tactic was working, noting press reports that drugmakers AstraZeneca and GSK planned to lower prices.

What kind of steps did he request? Trump ordered drug makers to give the best prices among developed nations, known as most favored nation or MFN prices, to all Medicaid patients. Companies must promise not to offer better prices on new drugs to other developed countries than what’s being offered to U.S. consumers, the White House added. Manufacturers must have an avenue to sell drugs directly to patients, thereby cutting out the middlemen. Trade policy should also be used to support manufacturers in charging higher prices internationally, with the revenue benefiting American patients, the White House said.

Why is the United States doing this? The president is acting to rebalance a flawed system that lets pharmaceutical manufacturers give low prices to other wealthy nations while charging Americans supremely higher prices, the White House said Thursday. The United States holds less than 5% of the world’s population but somehow accounts for about 75% of global pharmaceutical profits, the release noted.

Didn’t the White House do something like this before? The Biden administration a year ago said it successfully negotiated for lower prices on drugs. Trump signed an executive order in May to reduce the cost of some medications.

Dig deeper: Read my report on the Trump administration’s plan to destroy USAID contraceptive drugs.