U.S. President Donald Trump stated, “We’re gonna get the drug costs down. Not 30 or 40 %, which might be nice, not 50 or 60, no. We’re gonna get ’em down 1,000 %, 600 %, 500 %, 1,500 %.”(Picture by CHRISTOPHER FURLONG/POOL/AFP through Getty Photos)POOL/AFP through Getty Photos
U.S. President Donald Trump is now promising to get pharmaceutical firms to considerably scale back the drug costs that they’re charging Individuals. And on Thursday, Trump despatched letters to the heads of 17 main pharmaceutical firms pushing them to chop the prescription remedy costs that Individuals face all the way down to the degrees that folks in different nations pay. It’s not clear but whether or not such a tactic will work or what different methods the Trump administration might implement in addition to a sternly-worded letter. However one factor’s for positive: Trump has set a fairly umm bold purpose: getting drug costs down by 500% to 1500%.
Trump Spoke Of 600%, 1000% And 1500% Reductions in Drug Costs
Yep, you heard that appropriately. In a July reception with members of Congress, Trump declared, “That is one thing that no person else can do. We’re gonna get the drug costs down. Not 30 or 40% which might be nice, not 50 or 60, no. We’re gonna get ‘em down 1,000%, 600%, 500%, 1,500%.” You possibly can see him saying this in a video that’s posted on what was Twitter:
He went on to say, “We may have diminished drug costs by 1,000% by 1,100, 1,200, 1,300, 1,400, 700, 600; not 30 or 40 or 50% however numbers the likes of which you’ve by no means even dreamed of earlier than.” as you’ll be able to see within the following video posted on X:
Nicely, there’s one factor that Trump was 100% right about: no person else can try this. It might be onerous to seek out somebody to get the costs of medicines down by any greater than 100%. That and it’s in all probability one thing you’ve gotten by no means even dreamed of earlier than, since for-profit pharmaceutical firms are often attempting to make, you understand, a revenue. Make that two issues.
Let’s do the maths to know what a 1500% discount in drug costs would appear like. Say a bottle of a drugs presently prices $100. A 25% worth discount would carry this value all the way down to $75. A 100% worth discount would make the remedy utterly free. Any discount higher than 100% would presumably imply that the producer must pay you. Thus, a 200% worth discount would lead to a $100 payday per bottle for you. Holy, new strategy to earn cash, Batman! If Trump can get you a 1500% discount, hallelujah, time to interchange filming YouTube movies with “shopping for” medicines as the best way to generate income.
Now, the probabilities that the Trump administration will obtain a 1500% discount in drug costs are in all probability an entire lot lower than 100%. Getting pharmaceutical firms who’ve been having fun with very wholesome earnings for years to pay clients to take their medicine could be fairly a trick. Plus, the pharmaceutical firms must change their ads in order that as an alternative of telling you that you could have a situation that you simply don’t notice you’ve gotten, the advertisements would possibly say one thing like “Please don’t use our medicines. We are able to’t afford you to take action.”
Trump Despatched Letters To 17 Pharmaceutical Corporations Outlining Steps To Cut back Drug PricesWhite Home Press Secretary Karoline Leavitt shows a letter addressed to US pharmaceutical firm Eli Lilly from President Donald Trump in the course of the day by day briefing within the Brady Briefing Room of the White Home in Washington, DC, on July 31, 2025. (Picture by JIM WATSON/AFP through Getty Photos)AFP through Getty Photos
That 1500% quantity might not have been within the letters that Trump despatched on Thursday to pharmaceutical producers together with 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. In accordance with the White Home, the letters listed steps to scale back the costs of prescribed drugs within the U.S. “to match the bottom worth supplied in different developed nations (often known as the most-favored-nation, or MFN, worth)” The steps are as follows:
“Calling on producers to supply MFN costs to each single Medicaid affected person.
Requiring producers to stipulate that they won’t supply different developed nations higher costs for brand new medicine than costs supplied in the US.
Offering producers with an avenue to chop out middlemen and promote medicines on to sufferers, offered they achieve this at a worth no larger than the very best worth out there in developed nations.
Utilizing commerce coverage to assist producers in elevating costs internationally offered that elevated revenues overseas are reinvested immediately into decreasing costs for American sufferers and taxpayers.”
The letters asserted that there’s been “world freeloading on American pharmaceutical innovation” and did warn that if the outlined steps weren’t taken by the pharmaceutical firms the federal authorities “will deploy each device in our arsenal to guard American households from continued abusive drug pricing practices.”
Trump Signed An Government Order Relating to Drug Costs In Might
With that, pharmaceutical firms can now be 1500% or so positive that the Trump administration has them in its political line-of-sight. Again on Might 12, Trump signed an Government Order that asserted the next: “The USA has lower than 5 % of the world’s inhabitants and but funds round three quarters of worldwide pharmaceutical earnings. This egregious imbalance is orchestrated via a purposeful scheme wherein drug producers deeply low cost their merchandise to entry international markets, and subsidize that lower via enormously excessive costs in the US.”
That Government Order indicated that the U.S. Secretary of Well being and Human Companies, who’s presently Robert F. Kennedy, Jr., “shall facilitate direct-to-consumer buying applications for pharmaceutical producers that promote their merchandise to American sufferers on the most-favored-nation worth.”
Individuals Do Pay Increased Drug Costs Than These In Different International locations
It’s true that drug costs are sometimes considerably larger within the U.S. than in different nations. For instance, a June 2024 publication within the RAND Well being Quarterly described how drug costs within the U.S. have been on common almost thrice larger than these in 33 different high-income nations. Over the previous 20 years, yearly rises in drug costs have simply outpaced inflation. A 2024 KFF ballot confirmed that almost all of Individuals surveyed have been nervous about prescription remedy prices being too excessive.
Such worries shouldn’t be that shocking. Many prescription medicines usually are not like mullets or fruitcakes. In lots of instances, taking them isn’t a selection. Your well-being and even your life might actually rely upon with the ability to afford completely different medicines.
And plenty of pharmaceutical firms have proven no qualms about elevating the worth of medicines as quickly as they will. For instance, even after receiving substantial funding from the U.S. authorities, Pfizer and Moderna rapidly raised the costs of their COVID-19 vaccines as quickly as the federal government wouldn’t utterly pay for them, as I described in Forbes in 2023.
It is usually true that discuss drug costs being too excessive within the U.S. isn’t new. But, not one of the Presidential Administrations and Congresses over the previous 20 years have managed to considerably alter these traits. I’ve written about state-wide efforts to scale back drug costs, equivalent to Proposition 61 in California. However there’s been an absence of extra complete efforts on the federal degree to take action.
The problem is that quite a lot of traits within the present U.S. system are contributing to larger drug costs. For instance, mergers and acquisitions through the years have led to fewer, bigger and extra dominant pharmaceutical firms with much less competitors. Present value constructions and necessities make it harder for brand new pharmaceutical firms to emerge and supply extra competitors. Cuts in funding and assist for scientific analysis has made it tougher and tougher to develop new merchandise. Fewer new merchandise go away sufferers with fewer options and current merchandise with much less competitors. Customers and completely different purchasers have lacked negotiating energy usually.
On the similar time, it looks as if increasingly more folks have been getting items of the drug worth pie. This has included numerous center folks equivalent to pharmacy advantages managers and completely different directors. The advertising budgets of pharmaceutical firms have continued to develop as nicely. On prime of that, traders have anticipated pharmaceutical firms to have ever rising profitability.
All of which means a single easy intervention in all probability has a small share likelihood of decreasing drug costs in a sustainable method. As an alternative, a system method could also be wanted, that means a number of interventions at completely different factors within the system that work collectively in a coordinated method. In any other case, there could also be unintended penalties.
A sustainable discount in drug costs would imply one wherein the maths would work out for all sufferers. You don’t desire a state of affairs the place the costs of some medicine are diminished whereas these of others are raised. You additionally don’t desire a state of affairs the place drug costs are ostensibly lowered however made up by hidden prices that sufferers find yourself paying. In different phrases, ought to anybody declare that drug costs have been diminished by sure share, you wish to guarantee that the share is actual.
