Letters demand global price parity and refunds to taxpayers
President Donald Trump issued formal letters to 17 major pharmaceutical companies on Thursday, demanding that they lower U.S. prescription drug prices within 60 days. The letters, shared on his Truth Social platform, call for a sweeping shift toward international pricing parity and patient access reforms across Medicaid, Medicare, and private insurance.
Trump instructed the companies to offer their full range of medications to Medicaid recipients at prices equivalent to the lowest available abroad, invoking the so-called “most favored nation” rule. He also demanded pricing parity for all newly approved drugs upon launch and suggested the creation of direct-to-consumer channels for certain medications.
Legal authority unclear, industry pushback expected
While the letters marked Trump’s most aggressive drug pricing move in his second term, legal experts note that executive authority to enforce such measures without Congressional approval is limited. Past attempts to implement the “most favored nation” pricing model faced legal setbacks during Trump’s first term and remain politically contentious.
Tricia Neuman, a health policy expert at KFF, warned that voluntary compliance from drugmakers is unlikely. “Drug prices only come down when compelled by law or competition,” she said, adding that the industry has historically resisted price controls. The letters are expected to trigger significant pushback from drug manufacturers and their lobbying groups.
High U.S. prices under renewed political pressure
Trump’s renewed focus comes amid persistent criticism that Americans pay more for medication than consumers in other wealthy nations. RAND Corporation data shows U.S. drug prices can be up to 10 times higher than abroad. According to recent polls, over 75% of American adults consider medication costs unaffordable.
In May, Trump signed an executive order to revive stalled efforts to implement the “most favored nation” pricing strategy. The new letters escalate that approach by threatening to use “every tool in our arsenal” if companies fail to cooperate voluntarily. Trump also called for revenue earned from higher international prices to be returned to U.S. taxpayers.
Medicare negotiations underway via Biden-era law
The Trump administration’s latest demands arrive as the federal government is already preparing to lower prices through another route. Under the Inflation Reduction Act signed by President Biden, Medicare has begun negotiating prices for the most expensive drugs. The first round of negotiated prices is expected to take effect in 2026, with projected savings of $6 billion.
While that process continues, Trump’s letters add pressure on companies such as Pfizer, Merck, Eli Lilly, Johnson & Johnson, and Novo Nordisk. Some firms, including Novo Nordisk, responded by reaffirming their commitment to affordability but stopped short of agreeing to Trump’s terms. Industry group PhRMA has not yet issued a public statement.