Trump: will be reducing drug prices by 1400-1500%

Trump: will be reducing drug prices by 1400-1500%

The Trump administration is stepping up its efforts to lower drug prices in Medicare, potentially leading to significant reductions. This move comes as part of the ongoing negotiations facilitated by the Centers for Medicare and Medicaid Services (CMS), which have been mandated by the Inflation Reduction Act passed by Democrats [1].

In a recent letter to the CEOs of 17 major pharmaceutical companies, President Trump reiterated his demand for most-favored nation (MFN) drug pricing. This pricing model, which aims to match the lowest prices available in other developed countries, was a central theme of Trump's executive order in May 2025 [2]. The letter, which was sent in July 2025, outlined expectations for the companies to extend MFN pricing to Medicaid, guarantee MFN pricing for new drugs, and provide for direct purchasing at MFN prices [3].

The Trump administration is also leveraging trade policy to support these efforts, urging manufacturers to reinvest increased revenues abroad directly into lowering prices for American patients and taxpayers. This approach is part of a broader strategy to address what the administration sees as a significant disparity in drug pricing between the United States and other OECD nations [3].

Analysts and insiders suggest that the CMS may press for substantial price reductions during the current round of Medicare drug price negotiations. This aggressive stance is expected to have significant implications for the pharmaceutical industry and the broader healthcare market [1].

The impact of these negotiations could be substantial, potentially leading to a reduction in drug prices by 1400-1500% for Medicare recipients. This reduction is part of a broader effort to make pharmaceuticals more affordable for American consumers and taxpayers [1].

The Trump administration's push for lower drug prices is part of a larger trend towards greater regulation and scrutiny of the pharmaceutical industry. This trend is driven by concerns about the high cost of prescription drugs and the need to ensure that American consumers receive fair and affordable access to these essential medications [1].

References:
[1] https://www.statnews.com/2025/08/19/trump-medicare-drug-price-negotiations-expected-to-exceed-biden/
[2] https://investorsobserver.com/news/stock-update/trumps-big-pharma-ultimatum-could-make-goodrx-gdrk-multi-bagger/
[3] https://angle.ankura.com/post/102l0he/most-favored-nation-drug-pricing-developments