Trump administration issues 60-day ultimatum to drugmakers to align US prices with international rates

President Donald Trump has issued letters to 17 major pharmaceutical companies requesting commitments to provide US patients with the same prices for prescription drugs as those in other developed nations, setting a 60-day deadline and threatening further action if the industry fails to comply.

On July 31, 2025, the Trump administration sent formal letters to the CEOs of 17 pharmaceutical companies, requesting that US drug prices be brought in line with those offered in other developed countries. The letters referenced a May 2025 Executive Order focused on implementing a “Most-Favored-Nation (MFN)” pricing model, which seeks to ensure that Americans pay no more than the lowest price available internationally for the same medication. Companies were given until September 29, 2025 to submit binding commitments or face potential federal action.

According to the administration, the policy aims to reduce the financial burden on American patients and taxpayers by addressing long-standing pricing disparities. The letters outlined four key expectations:

1. Extend MFN pricing to all Medicaid patients, offering the lowest price available in other developed nations across the company’s full portfolio of existing drugs.
2. Guarantee MFN pricing for all new medicines, ensuring parity for Medicare, Medicaid, and commercial insurers at launch and thereafter.
3. Reinvest increased international revenues, with companies asked to direct gains from higher overseas prices toward lowering costs in the US
4. Implement direct-purchase options, allowing Americans to access MFN-level pricing through consumer or business-facing channels without relying on intermediaries.

In the letters, President Trump wrote:

“My team... stand ready to implement these terms. I expect you to further engage with them immediately, in good faith... but if you refuse to step up, we will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.”

The letters were publicly posted on the President’s Truth Social account, signaling a shift from private negotiations to a more visible and time-bound strategy. Companies receiving the letters include 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. Observers noted the absence of several large manufacturers such as Biogen, Takeda, and Bayer, and pointed out that Genentech was contacted directly rather than its parent company, Roche.

A White House fact sheet accompanying the announcement emphasized the administration’s concern that US consumers may be indirectly subsidizing lower drug prices in other countries. It cited data indicating that prices for brand-name drugs in the US are more than three-times higher than those in other OECD nations, even after discounts. The US reportedly accounts for less than 5% of the global population but generates approximately 75% of pharmaceutical industry profits.

“Americans are demanding lower drug prices, and they need them today,” Trump stated. “Other nations have been freeloading on US innovation for far too long; it is time they pay their fair share.”

Industry responses and expert commentary

The policy announcement has generated a range of reactions. Some stakeholders viewed it as a strong signal of the administration’s focus on drug pricing reform, while others raised concerns about feasibility and legal authority.

Neil Grubert (Independent Global Market Access Consultant) described the letters as “an ultimatum” that demands “binding commitments” from the companies named. The letters, he said, framed existing proposals as “shifting blame” and failing to deliver “immediate relief” for American families.

Citi Research analysts described the move as, “likely more public display of political pressure than a warning of definitive legislative action,” noting that executive authority to enforce pricing reforms remains limited without Congressional support.

David Risinger (Analyst, Leerink Partners) noted that the proposals could have broader implications for US manufacturers, including reduced profitability, less funding for R&D, and increased competition from international firms:

“The demands ... are unachievable, given significant negative implications for the US biopharmaceutical company: a) revenue and profits; b) ability to invest in innovation; and c) ability to compete with rising ex-US competition, in particular from Chinese biopharma companies,” he wrote.

Other experts also expressed skepticism about implementation. Maximilian Lebmeier (Director, Athena Market Access Solutions) commented:

“Some big words, but hard to see how this would work in practice. Global knock-on effects could be interesting to watch.”

Claire Woon (Commercial Director, red thread) observed that the MFN concept had re-emerged as a central policy priority:

“Just when everyone was wondering if MFN had been put on the back burner, Donald Trump has put it front and center again,” she wrote. “This latest development demonstrates that the pharmaceutical industry is still well within this administration’s crosshairs for reform.”

She also noted that while the approach is not yet codified in legislation, the 60-day deadline signals a shift in tone. Possible consequences of non-compliance could include the use of trade tools or changes to patent protections.

Tricia Neuman (Executive Director of the Medicare policy program, KFF) also questioned the likely impact of the letters:

“It may take more than a tough letter from the President to motivate the pharmaceutical industry to drop their prices. The voluntary approach hasn’t worked so far… Drug prices tend to go down when compelled by law or in response to competition.”

Pharmaceutical companies have so far responded with caution. A spokesperson for Novo Nordisk stated that the company would, “continue to work to find solutions that help people access the medication they need.” Eli Lilly indicated it was reviewing the letter and referred inquiries to the Pharmaceutical Research and Manufacturers of America (PhRMA), which has not yet issued a response.

Outlook and implementation considerations

While the letters target manufacturers, the proposed policy changes could have broader implications for patient access, provider reimbursement models, and insurance negotiations. If implemented, the administration argues that reduced acquisition costs could improve affordability. However, several experts have noted that abrupt shifts in pricing strategies could also impact availability, market dynamics, and investment in new therapies.

As the 60-day deadline approaches, the focus will remain on how manufacturers respond and whether the administration will escalate its efforts through regulatory or trade measures. The outcome of this initiative may influence broader discussions around healthcare affordability and the future direction of US pharmaceutical policy.