Trump demands drug companies lower prices before end of September

Original from: Financial Times

President Donald Trump has demanded “binding commitments” from 17 pharmaceutical companies to lower drug prices, escalating his efforts to cut consumer costs and sending their share prices lower.

In letters to the companies released on Thursday, Trump said he expected them to deliver on a series of measures to lower prices by September 29. “If you refuse to step up, we will deploy every tool in our arsenal to protect American families from continued abusive drug prices,” the letters said, without specifying what could come next.

Share prices for many pharmaceutical companies dropped on the announcement. AstraZeneca, Merck, Regeneron, Eli Lilly, Novo Nordisk, Pfizer and GSK were all trading lower on Thursday afternoon. Notably, Roche and Takeda Pharmaceuticals, based in Switzerland and Japan respectively, were not on Trump’s list of companies to receive letters. However, Roche’s subsidiary Genentech did receive a letter.

The letters asked the groups to apply “most favoured nation” drug pricing to Medicaid, the US health programme for low-income people. They also asked drugmakers to offer new medicines at the same price in the US as in other developed countries, and offer direct-to-consumer drug sales that would “cut out middlemen” such as pharmacy companies.

The demands follow Trump’s pledge in May to lower US drug prices by up to 80 per cent.

It is unclear if Trump has the power to implement price controls. In September 2020, the president proposed similar “most favoured nation” practices, but pharmaceutical companies challenged the White House in court and won injunctions, halting the president’s efforts.

The S&P healthcare sector is down 2.7 per cent this year, versus an 8 per cent increase for the S&P 500 index.

Trump’s moves have led to a surge in pharmaceutical lobbying. The main lobbying group for pharmaceutical companies, Phrma, has spent $20mn in 2025, a record amount for the first six-months of any year.

Merck spent a record $5mn in the second quarter and Eli Lilly has spent the most in a six-month period since 2009. The Trump administration has also proposed tariffs for the pharmaceutical sector that are separate from his country-by-country trade deals. Trump has said these tariffs would not go into effect for at least a year, and they have largely been shrugged off by investors.

Source: Trump demands drug companies lower prices before end of September