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President Donald Trump has given major drugmakers 60 days to reduce prescription drug prices in the United States. On Thursday (July 31), Trump sent letters to 17 pharmaceutical companies, urging them to align U.S. drug prices with those offered in other countries. The letters, posted on his social media platform Truth Social, demand that companies extend "Most Favored Nation" pricing to all drugs provided to Medicaid enrollees and ensure that Medicaid, Medicare, and commercial insurers pay these prices for new drugs.
The directive follows an executive order signed in May, which aimed to lower U.S. drug prices that are often more than triple those in other developed nations. Trump expressed dissatisfaction with previous proposals from drugmakers, which he claimed offered no real solutions. He warned that if companies do not comply, his administration would use every available tool to protect American families from high drug prices.
Potential consequences for non-compliance include directing the Department of Health and Human Services to implement new rules, allowing more drug imports, reviewing drug exports, and possibly revoking FDA approvals for certain drugs. The Pharmaceutical Research and Manufacturers of America, the industry's main trade association, has yet to comment on the letters.
The stock prices of several companies that received the letters, such as Eli Lilly, Merck, and Johnson & Johnson, fell following the announcement. The S&P 500 Pharmaceuticals Industry Index dropped by over 2%.
Trump's previous attempt to establish a "Most Favored Nation" rule for Medicare drugs was blocked by federal courts and later rescinded by President Joe Biden in 2021.