Lowering Drug Prices Dramatically: Trump Promises Up to Fifteen Times Increase
The Trump administration has unveiled a bold plan to reduce prescription drug prices by approximately two-thirds, primarily through the revival of the Most-Favored-Nation (MFN) pricing policy. This policy aims to align U.S. drug prices with the lowest prices paid by other developed nations for the same medications.
In a video posted on what used to be Twitter, President Trump outlined the steps to achieve this significant reduction, including directing pharmaceutical companies to lower U.S. prices to match the lowest international rates, requiring drug manufacturers to offer the MFN prices to all Medicaid beneficiaries, and allowing consumers to purchase medicines directly from manufacturers at prices capped by MFN agreements.
The administration also plans to use trade policy incentives to encourage manufacturers to raise prices internationally only if the additional revenues are reinvested to lower U.S. drug prices. This approach, initiated by an executive order titled "Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients" issued on May 12, 2025, revives a previously halted MFN strategy.
The average price of prescription medications in the U.S. is nearly three times higher than in 33 other high-income countries, according to a June 2024 publication in the RAND Health Quarterly. The sharp reductions reflect an attempt to dismantle the current system that lacks international price parity and to reduce taxpayer and consumer burden.
However, the exact 66% figure appears to represent a broader goal consistent with the MFN initiative's potential scale of price reductions rather than a fixed immediate target. Getting pharmaceutical companies to pay customers for their medications would be a challenging feat, and the chances that the Trump administration will achieve a 1500% reduction in drug prices are likely less than 100%.
The administration's action has generated controversy and legal challenges, signaling complexity in implementation. Notably, the administration also proposed a phased plan for imposing high tariffs on imported pharmaceuticals to boost domestic manufacture, but this move is separate and viewed as potentially increasing prices rather than lowering them.
In July 2024, Trump mentioned potential reductions in drug prices of up to 1500% during a reception with members of Congress. The White House did not confirm whether the 1500% reduction figure was included in the letters sent to pharmaceutical companies, including AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi.
The majority of Americans expressed concern about prescription medication costs being too high in a 2024 KFF poll. The pharmaceutical companies' advertisements would likely have to change if a 1500% reduction in drug prices were achieved. However, cuts in funding and support for scientific research have made it harder and harder to develop new products.
Talk about drug prices being too high in the U.S. is not new, but none of the Presidential Administrations and Congresses over the past two decades have managed to significantly alter these trends. A sustainable reduction in drug prices would mean one in which the math works out for all patients, avoiding situations where the prices of some drugs are raised while others are lowered, or where hidden costs are passed on to patients.
[1] White House Fact Sheet: Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients. (2025, May 12). Retrieved from https://www.whitehouse.gov/briefings-statements/white-house-fact-sheet-delivering-most-favored-nation-prescription-drug-pricing-american-patients/
[2] Trump Administration Unveils Plan to Cut Prescription Drug Prices. (2025, May 12). Retrieved from https://www.cnbc.com/2025/05/12/trump-administration-unveils-plan-to-cut-prescription-drug-prices.html
[3] Bender, B. (2025, May 12). Trump administration to revive drug pricing plan with executive order. Politico. Retrieved from https://www.politico.com/news/2025/05/12/trump-administration-to-revive-drug-pricing-plan-with-executive-order-00007162
- The Trump administration's plan, as outlined in the White House Fact Sheet and various news sources, aims to cut prescription drug prices by approximately two-thirds through the implementation of the Most-Favored-Nation (MFN) pricing policy, science-based therapies-and-treatments, and health-and-wellness initiatives.
- The revival of the MFN strategy, as an executive order issued by President Donald Trump on May 12, 2025, intends to achieve significant reductions in pharmaceutical prices, potentially leading to a transformation in health-care, medication prices, and health benefits for millions of Americans.
