Trump wants pharma companies to lower drug prices in US
What's the story
US President Donald Trump has demanded that some of the world's biggest pharmaceutical companies cut their drug prices in the country. The demand is to bring them down to the lowest price paid by other countries, Bloomberg reported. In letters sent to 17 major drugmakers, including Eli Lilly, Novo Nordisk, and Pfizer, Trump demanded immediate price reductions for existing drugs on Medicaid, and promised future launches would have pricing parity with international markets.
Support offer
US will support companies in raising drug prices abroad
Trump said the US government would support companies in raising drug prices abroad to match domestic levels. However, he insisted that any additional profits made overseas should be returned to reduce US drug costs. "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," Trump wrote on Truth Social.
Consumer access
Companies have been given a 60-day deadline to comply
Trump also urged the companies to introduce direct-to-consumer purchasing mechanisms for high-volume drugs. This would let patients bypass third-party insurers and get medications at the same discounted prices they currently get through insurers. The pharmaceutical companies have been given a 60-day deadline to comply with Trump's demands or face potential action from his administration against "continued abusive drug pricing practices."
Market impact
Stocks of targeted companies affected
The announcement from Trump has already affected the stocks of several targeted companies. Eli Lilly's stock fell by 0.7% in early afternoon trading in New York, while AbbVie Inc, another firm that received the letter, pared earlier gains. The S&P's 500 Pharmaceuticals Index also plunged 2.7%, led by declines in stocks of Merck & Co and Bristol-Myers Squibb Co, after Trump's latest demands were made public.
Industry reaction
Industry's opposition to globally linked drug prices
The pharma industry has long opposed the idea of globally linked drug costs, fearing it could hurt US dominance in biomedical research and prevent patients from getting necessary medicines. After Trump's latest demands, individual firms expressed willingness to work with the administration on access and affordability. However, Alex Schriver, a spokesman for PhRMA—the industry's largest trade group—said, "Importing foreign price controls would undermine American leadership, hurting patients and workers."