The White House has escalated its push to lower prescription costs in the United States, with President Donald Trump vowing reductions as large as 500 percent to 1500 percent and sending letters to 17 major pharmaceutical companies. The administration is pressing firms to match the lowest prices offered in other developed countries and to deliver rapid commitments on a tight timeline. Markets and manufacturers are already reacting as the policy stakes and practical challenges come into focus.
Key takeaways
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Trump has pledged to cut U.S. drug prices by 500 percent to 1500 percent, a headline claim intended to signal an aggressive stance on affordability.
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The White House sent letters to 17 pharmaceutical companies demanding binding commitments to lower prices to most favored nation levels by late September, a 60-day window from the notice.
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Companies were pressed to provide lowest-available prices to Medicaid, avoid selling to other developed markets at better prices than in the U.S., and sell directly to patients to bypass pharmacy benefit managers.
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The administration warned it would use every tool available if companies do not comply, while also hinting at tariffs that could reach as high as 200 percent on the sector.
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Early signals include reported engagement by firms and market volatility, with notable share moves in high-profile drugmakers following the announcements.
What the ultimatum actually proposes
At the core is a most favored nation approach that pegs U.S. prices to the lowest paid in other advanced economies, a model meant to narrow long-standing price gaps. The letters also urge direct-to-patient sales to reduce intermediaries and require that Medicaid patients get MFN pricing. In addition, the administration is pressuring companies not to offer better deals abroad than at home, shifting leverage toward U.S. buyers.
The math behind 1500 percent
A 1500 percent reduction would imply prices dropping far below zero, which is not realistic in a commercial market. The more concrete policy signal is alignment with other developed markets, which analysts note could translate to sizable, but far smaller, cuts if executed as MFN. The White House letters are the operative lever; the extreme percentage rhetoric underscores intent more than likely outcomes.
Industry and market reaction
Pharmaceutical companies scrambled to respond to the new letters and the September deadline, with investors digesting both pricing pressure and broader trade risks. Shares in several drugmakers wobbled, including a notable early drop in a leading obesity drug manufacturer before partial recovery, reflecting uncertainty about margin impacts and policy clarity. The named recipients span much of Big Pharma and biotech, including AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol-Myers Squibb, Eli Lilly, Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron, Sanofi, and EMD Serono.
What comes next on the 60-day timeline
The immediate milestone is late September, when companies are expected to present binding commitments to reach MFN pricing. The White House has indicated it will consider further action if proposals fall short, though the exact enforcement tools and sequencing remain unspecified. Watch for company-by-company pledges, any pilot direct-to-patient programs, and whether Medicaid-specific MFN mechanics surface in official filings or guidance.
Why this matters for patients and payers
For consumers, MFN alignment could mean lower out-of-pocket costs on high-spend therapies, particularly where U.S. prices have materially exceeded those abroad. Medicaid programs could see direct savings if MFN is operationalized, while pressure to bypass PBMs might change how discounts flow, potentially reshaping formularies and pharmacy channels. Manufacturers, meanwhile, face strategic choices on global list pricing, supply allocation, and R&D budgets as they balance U.S. concessions against international reference pricing dynamics.
Sources: CNBC, Forbes, The White House
