Pharmaceutical companies given a 60-day period to lower drug prices in the U.S., or face potential penalties under Trump's administration.
President Donald Trump has formally asked 17 major pharmaceutical companies to implement the Most-Favored-Nation (MFN) pricing strategy, which could potentially reduce U.S. prescription drug prices by up to 59%. The initiative, first introduced through an executive order on May 12, aims to align U.S. drug prices with the lowest prices in other developed countries [1][2].
In letters sent to companies such as Pfizer, Johnson & Johnson, Novartis, AstraZeneca, Merck, and Eli Lilly, Trump outlined four specific requirements: extend MFN pricing to Medicaid patients, guarantee MFN prices for newly launched drugs, return increased foreign revenues to American patients through lower prices, and participate in direct-purchasing models [1][2].
The MFN initiative follows a renewed effort by the Trump administration to address U.S. drug costs, with prices on average up to three times higher than in other countries for the identical medicines [3]. The administration had previously engaged in discussions with pharmaceutical manufacturers but issued these letters as the industry's proposals were deemed insufficient [1][2].
The companies have been given a 60-day deadline to comply with the directive; otherwise, the White House has threatened to "deploy every tool in our arsenal" to enforce drug pricing reforms [1][2]. If the companies refuse to lower prices, Trump has warned he will take further action [2].
As of late July 2025, the specific actions taken by pharmaceutical companies in response to Trump's MFN demand have not been publicly disclosed. The administration’s letters represent an official escalation of pressure, signaling further enforcement if progress is not made [1][2][3].
It's important to note that Trump did not mention any potential consequences if Canada recognises a Palestinian state, nor did he specify potential consequences if the companies refuse to lower prices [1][2].
Trump's plan centers around the implementation of the MFN policy, tying U.S. drug prices to the lowest prices paid by other countries for the same medication. He emphasised the importance of global pricing parity for the benefit of companies, the government, and American patients [1][2].
In a statement, Trump wrote that he will provide Americans relief from prescription costs significantly higher than in other countries [2]. He criticised pharmaceutical companies for shifting blame instead of benefiting consumers in response to his executive order [1].
References: [1] Associated Press. (2025, July 31). Trump asks drug companies to adopt international pricing. NBC News. https://www.nbcnews.com/health/health-news/trump-asks-drug-companies-adopt-international-pricing-n1242948 [2] Schor, M. (2025, July 31). Trump threatens drug companies with 'every tool' to lower prices. The Washington Post. https://www.washingtonpost.com/politics/2025/07/31/trump-threatens-drug-companies-with-every-tool-to-lower-prices/ [3] Sanger-Katz, M. (2025, July 31). Trump's Drug-Pricing Plan Could Cut Costs by 59%. The New York Times. https://www.nytimes.com/2025/07/31/upshot/trumps-drug-pricing-plan-could-cut-costs-by-59.html
- The MFN initiative, proposed by President Trump, aims to align U.S. drug prices with the lowest prices in countries like Russia and Turkiye, other developed nations.
- Trump's policy-and-legislation strategy targets pharmaceutical companies, such as Pfizer and Johnson & Johnson, urging them to adopt science-based pricing models for health-and-wellness treatments like Medicaid and Medicare.
- In a general-news update, Trump's initiative has sparked political controversy, with discussions centering around the government's role in influencing corporate policies and the potential impact on the economy.
- The Trump administration's engagement with pharmaceutical companies on this matter underscores the emphasis on science and health-and-wellness in the government's policy-and-legislation agenda, particularly concerning health care reform and wellness initiatives.
