Trump Says He Will Get Drug Prices Down By 1500%

Would you like a reduction in the prices that you pay for medications? How about a 30% to 40% reduction? Or maybe a 50% to 60% reduction? Why stop there? U.S. President Donald Trump has promised an even greater reduction, a 500% to 1500% reduction. Yes, you heard that correctly. How that specifically is going to happen is unclear. But on Thursday, Trump did send letters to the heads of 17 major pharmaceutical companies pushing them to cut the prescription medication prices that Americans face down to the levels that people in other countries pay, which by the way would be around a 66% reduction.

Trump Spoke Of 600%, 1000% And 1500% Reductions in Drug Prices

Trump mentioned those, umm, interesting percentages in a July reception with members of Congress, when he declared, “This is something that nobody else can do. We’re gonna get the drug prices down. Not 30 or 40% which would be great, not 50 or 60, no. We’re gonna get ‘em down 1,000%, 600%, 500%, 1,500%.” You can see him saying this in a video that’s posted on what used to be Twitter:

He went on to say, “We will have reduced drug prices by 1,000% by 1,100, 1,200, 1,300, 1,400, 700, 600; not 30 or 40 or 50% but numbers the likes of which you’ve never even dreamed of before,” as you can see in the following video posted on X:

Well, there’s one thing that Trump’s probably 100% correct about: nobody else can do that. Getting a 1500% price reduction would presumably mean that pharmaceutical companies would be paying you to take their medications not just a little but a lot. Getting pharmaceutical companies to do that is probably something you have never even dreamed of before, since for-profit pharmaceutical companies are usually trying to make, you know, a profit. So, make that two things that Trump was right about.

Trump Sent Letters To 17 Pharmaceutical Companies Outlining Steps To Reduce Drug Prices

That 1500% number may not have been in the letters that Trump sent on Thursday to pharmaceutical manufacturers 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. According to the White House, the letters listed steps to reduce the prices of prescription drugs in the U.S. “to match the lowest price offered in other developed nations (known as the most-favored-nation, or MFN, price)” The steps are as follows:

• “Calling on manufacturers to provide MFN prices to every single Medicaid patient.
• Requiring manufacturers to stipulate that they will not offer other developed nations better prices for new drugs than prices offered in the United States.
• Providing manufacturers with an avenue to cut out middlemen and sell medicines directly to patients, provided they do so at a price no higher than the best price available in developed nations.
• Using trade policy to support manufacturers in raising prices internationally provided that increased revenues abroad are reinvested directly into lowering prices for American patients and taxpayers.”

The letters asserted that there’s been “global freeloading on American pharmaceutical innovation” and did warn that if the outlined steps weren’t taken by the pharmaceutical companies the federal government “will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.”

Trump Signed An Executive Order Regarding Drug Prices In May

With that, pharmaceutical companies can now be 1500% or so sure that the Trump administration has them in its political line-of-sight. Back on May 12, Trump signed an Executive Order that asserted the following: “The United States has less than five percent of the world’s population and yet funds around three quarters of global pharmaceutical profits. This egregious imbalance is orchestrated through a purposeful scheme in which drug manufacturers deeply discount their products to access foreign markets, and subsidize that decrease through enormously high prices in the United States.”

That Executive Order indicated that the U.S. Secretary of Health and Human Services, who is currently Robert F. Kennedy, Jr., “shall facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers that sell their products to American patients at the most-favored-nation price.”

Americans Do Pay Higher Drug Prices Than Those In Other Countries

It is true that presciption medications are significantly mroe expensive in the U.S. than in other countries. For example, a June 2024 publication in the RAND Health Quarterly described how drug prices in the U.S. were on average nearly three times higher than those in 33 other high-income countries. These are for the identical medications. It’s not as if Americans are paying a premium for extra special, more fashionable medications. And the prices keep going higher and higher. Over the past two decades, yearly rises in drug prices have easily outpaced inflation.

Not surprisingly, the affordability of prescription medications or lack thereof has become a big concern in the U.S. A 2024 KFF poll showed that the majority of Americans surveyed were worried about prescription medication costs being too high. Many prescription medications are not like mullets or fruitcakes. Taking such meds in many cases isn’t simply a luxury or a choice. Your well-being and even your life could literally depend on being able to afford different medications.

And many pharmaceutical companies have shown no qualms about raising the price of medications as soon as they can. For example, even after receiving substantial funding from the U.S. government, Pfizer and Moderna quickly raised the prices of their COVID-19 vaccines as soon as the government wouldn’t completely pay for them, as I described in Forbes in 2023.

It is also true that talk about drug prices being too high in the U.S. is not new. Yet, none of the Presidential Administrations and Congresses over the past two decades have managed to significantly alter these trends. I’ve written about state-wide efforts to reduce drug prices, such as Proposition 61 in California. But none of these seem to have significantly moved the dial in a sustainable manner, especially with a lack of more comprehensive and concerted efforts at the federal level.

The challenge is that a number of trends in the current U.S. system have been contributing to higher and higher drug prices. For example, mergers and acquisitions over the years have led to fewer, larger and more dominant pharmaceutical companies with less competition. Existing cost structures and requirements make it more difficult for new pharmaceutical companies to emerge and provide more competition. Cuts in funding and support for scientific research have made it harder and harder to develop new products and bring them to market. Fewer new products leave patients with fewer alternatives and existing products with less competition. Consumers and different purchasers have lacked negotiating power in general.

At the same time, it seems like more and more people have been getting pieces of the drug price pie. This has included various middle people such as pharmacy benefits managers and a range of different administrators. The marketing budgets of pharmaceutical companies have continued to grow as well. On top of that, investors have expected pharmaceutical companies to have ever increasing profitability. And guess what that means for drug prices.

All of the above means that a single simple intervention probably has a small percentage chance of reducing drug prices in a sustainable manner. Instead, more of a system approach may be needed, where multiple interventions are implemented at different points in the system so they that work together in a coordinated manner. It’s important to fully see, understand and address the entire system. Otherwise, simply implementing interventions here and there could be like throwing a net at a marmot in the kitchen in the dark: the likelihood of unintended consequences can be high.

And the math should work out for everyone, not just for some people or some situations. You don’t want a situation where the prices of some drugs are reduced while those of others are raised. You also don’t want a situation where drug prices are ostensibly lowered but quietly made up by hidden costs that patients end up paying in other ways or down the road. In other words, should anyone claim that drug prices have been reduced by certain percentage, you want to make sure that the percentage is real.