By Tami Luhby, CNN
Donald Trump. Photo: Mandel Ngan/AFP/Getty Images via CNN Newsource
US President Donald Trump wants drugmakers to lower their prices in the US - so he'll push them to raise prices in other countries to offset the hit to their bottom line, Commerce Secretary Howard Lutnick said.
"The president's going to say that you drug manufacturers cannot sell here unless you sell there at a higher price. Stop being willing to sell to them at such a low price," Lutnick said Friday on The Axios Show.
Lutnick's comments are the latest in a series of pronouncements by the Trump administration aimed at pressuring pharmaceutical companies to reduce drug prices for Americans.
The president's main effort centres on getting drugmakers to offer the same price in the US as they do in Europe and other peer countries, the so-called "Most Favoured Nation" price. Trump has repeatedly said that US patients are subsidising their counterparts elsewhere. Americans paid nearly three times as much for medications as did people in comparable countries in 2022.
However, experts have questioned Trump's authority to dictate drug prices in other countries or force companies to sell at certain prices in the US. Any mandate would likely be met with legal action.
'Most Favoured Nation' pricing
Trump tried to force "Most Favoured Nation" pricing on the pharmaceutical industry near the end of his first term, finalising a rule for a model program in which Medicare would pay the same price for 50 drugs administered in doctors' offices. But the initiative was quickly blocked in court on procedural grounds and later rescinded by the Biden administration.
In May, he revived the effort with an executive order that warned drug manufacturers to offer US patients the lowest price paid for a drug in a peer country or face repercussions. He castigated the European Union at the time for forcing drugmakers to provide their products at low prices, saying, "the game is up, sorry".
Unhappy with the results of subsequent negotiations between the industry and his administration, Trump wrote letters in late July to 17 major pharmaceutical CEOs.
In the letters, Trump called for manufacturers to extend "Most Favoured Nation" pricing to all drugs provided to Medicaid enrolees and demanded that the companies guarantee that Medicaid, Medicare and commercial-market insurers pay such prices for all new drugs.
Plus, he pushed drugmakers to sell certain medications directly to consumers at "Most Favoured Nation" prices, cutting out other players in the supply chain that can keep costs elevated.
His pressure campaign has yet to yield significant results in the US. Still, Trump is vowing to levy tariffs on pharmaceutical imports, particularly on pricey brand-name medicines.
Some industry experts have said that it's more likely that drugmakers will raise prices in other countries than lower them in the US. Last month, Eli Lilly announced it would hike the price of its weight-loss drug Mounjaro in the United Kingdom in order to reduce its cost in the US.
"This rebalancing may be difficult, but it means the prices for medicines paid by governments and health systems need to increase in other developed markets like Europe in order to make them lower in the US," the company said in a statement at the time.
The Pharmaceutical Research and Manufacturers of America, the industry's main trade association, said in a statement that getting "foreign countries to pay their fair share for innovative medicines" is one way to drive down prices. But it warned against implementing a "Most Favoured Nation" policy.
"For decades, the US innovation ecosystem has been the envy of the world, delivering groundbreaking medicines to patients and supporting millions of high paying American jobs," Alex Schriver, a PhRMA spokesperson, said in a statement. "Importing foreign price controls would undermine American leadership, hurting patients and workers."
CNN has reached out to the European Commission for comment.
- CNN
