Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
President Donald Trump is expected to announce a comprehensive initiative on Tuesday aimed at significantly reducing drug costs in the United States. The plan includes the creation of a direct-to-consumer website, “TrumpRx,” where Americans can purchase medications at discounted prices, alongside a specific agreement with pharmaceutical giant Pfizer to lower the cost of its drugs, according to sources familiar with the matter.
Efforts to Reduce Drug Prices
The anticipated announcement is part of a broader, multipronged effort by the Trump administration to address high prescription drug costs. Details regarding the specific terms of the deal with Pfizer remain unclear. Previously, in 2018, Pfizer had delayed price increases on several dozen medications following public complaints from President Trump during his first term.
President Trump has consistently pressed drugmakers to lower prices for U.S. patients, reviving his first-term “Most Favored Nation” policy. This policy seeks to compel drug manufacturers to align their domestic prices with the lowest rates they charge in other comparable countries.
Kush Desai, a White House spokesperson, stated that President Trump is “doing more to lower health care costs than anyone else in Washington, DC,” and is “leveraging the power of the federal government to drastically cut drug prices for everyday Americans.”
Regulatory Actions and Demands
In May, President Trump issued an executive order directing drugmakers to begin offering “Most Favored Nation” prices to U.S. patients. The order outlined potential consequences for non-compliance, including actions by the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA).
Following up on this, President Trump sent letters in July to the CEOs of 17 major pharmaceutical companies. These letters included demands for manufacturers to voluntarily extend “Most Favored Nation” pricing to all medicines provided to Medicaid enrollees and to guarantee such prices for all new drugs across Medicaid, Medicare, and commercial markets. The companies were given until Monday to comply.
The administration has also encouraged drugmakers to establish direct-to-consumer channels, allowing U.S. patients to purchase medications at lower prices without involving insurance. Several manufacturers have already begun to implement such programs.
For example, Novo Nordisk recently announced that a month’s supply of Ozempic, a diabetes drug, could be purchased for $499 by cash-paying consumers through its NovoCare Pharmacy, significantly less than its nearly $1,000 list price. Additionally, the Pharmaceutical Research and Manufacturers of America (PhRMA) launched AmericasMedicines.com on Monday, a website designed to connect patients with direct-purchase programs offered by drug companies.
Industry Response and Expert Skepticism
The pharmaceutical industry has voiced concerns regarding the “Most Favored Nation” directives. Alex Schriver, senior vice president at PhRMA, previously warned that “importing foreign price controls would undermine American leadership, hurting patients and workers.”
The expected announcement also precedes the Trump administration’s launch of a 100% tariff on brand-name pharmaceutical imports, set to take effect the day after the announcement, unless the drugmaker establishes a manufacturing plant in the U.S. Imports from the European Union will face a 15% levy under a separate trade agreement.
While lowering drug prices has been a central goal for President Trump since his first presidential campaign, experts have questioned the potential impact of his announced steps. They argue that the president may lack the legal authority to mandate “Most Favored Nation” prices and that drug companies are unlikely to voluntarily reduce U.S. prices significantly.
Some industry experts suggest that drugmakers may instead raise prices in other countries rather than lowering them in the U.S. Eli Lilly, for instance, announced in August that it would increase the price of its weight-loss drug Mounjaro in the United Kingdom to reduce its cost in America. Similarly, Bristol Myers Squibb stated it would sell its schizophrenia medication Cobenfy for the same list price in the United Kingdom as in the U.S.
Ongoing Efforts
This upcoming announcement marks the latest in President Trump’s continued efforts to tackle high drug costs, a persistent issue where Americans pay significantly more for medications than individuals in comparable countries. A “Most Favored Nation” rule finalized by HHS in late 2020 during his first term was blocked by federal courts and subsequently rescinded by then-President Joe Biden in 2021.
