Most favored nation price countdown! Trump pressures major drug companies to lower drug prices in the United States by September 29th.

Recently, US Commerce Secretary Howard Lutnick said in an interview with the media that President Donald Trump is pressuring major pharmaceutical companies in the US to lower drug prices. He hopes that they will commit to complying with Trump's "most-favored-nation treatment" pricing policy within the next few weeks. On July 31st, Trump wrote letters to 17 leading pharmaceutical companies with significant market share in the US, including Eli Lilly, Pfizer Inc., and Merck & Co., outlining the steps they should take to lower prices in accordance with the MFN policy to align their drug prices in the US market with those of other developed countries. Major US-based companies such as Gilead, Bristol-Myers Squibb, Johnson & Johnson, Regeneron, Amgen, and AbbVie, as well as large European companies such as Merck KGaA, Sanofi, GlaxoSmithKline, AstraZeneca, Novo Nordisk, Roche, and Novartis, also received letters from Trump. "The president will say, if the major drug manufacturers are not going to sell over there at a higher price, they are not going to be able to sell over here. Stop willing to sell to them at such a low price," Lutnick said in the interview. Trump has set a deadline of September 29th for the companies to comply with this MFN policy, and he made the aforementioned strong statement before that. According to Lutnick, President Trump is mobilizing multiple executive branch agencies to achieve this goal. "I just got a call from (Health Secretary) Bobby Kennedy. I got a call from (CMS Administrator) Mehmeh Oz, they both said to me, 'Alright, let's get this going,'" Lutnick added in the interview. "The president spent all day Saturday talking about this... He is talking about 'we have to get these prices down,'" Lutnick said. The so-called most-favored-nation policy (MFN) - that is, Trump's requirement to align US drug prices with the "lowest prices in other developed countries" and require major pharmaceutical companies in the US to not exceed the lowest level overseas, is enforced through administrative means. For the US government, high drug prices bring dual pressures on people's livelihoods and finances. The long-term high prices of prescription drugs in the US, with rising insurance expenditures, have led the Trump administration to view MFN as the most direct and quantifiable path to price reduction, which can quickly benefit patients and federal finances. In addition, the most straightforward issue of "lowering drug prices" for the public can bring positive effects on Trump's approval ratings and market expectations in the short term. The main reason for higher drug prices in the US is that the country has not negotiated or referenced pricing nationally like many other countries (e.g., UK's NICE, Germany's AMNOG). Brand-name drugs are almost unregulated after market entry and can repeatedly raise prices. However, after Trump returned to the White House, he tried to change this situation. Other factors include the multi-layered negotiations between commercial insurance, PBMs, and hospitals determining the "net price," where kickback incentives favor drugs with higher list prices and rebates, resulting in higher co-payments and self-payments for patients, an increase in overall pricing stickiness, and patent protection and exclusion strategies (patent thickets, patent extensions) plus a lack of direct competition through generics or biosimilars, giving manufacturers more bargaining power on prices.