MFN Pricing Countdown: Trump Pressures Big Pharma to Slash U.S. Drug Prices by September 29 Deadline

Intelligent Finance APP learned that U.S. Commerce Secretary Howard Lutnick recently told the media in an interview that President Donald Trump is leading multiple federal agencies to pressure major large pharmaceutical companies in the United States to lower drug prices. He hopes these companies will commit as soon as possible within the next few weeks to comply with the "most-favored-nation" (MFN) pricing policy led by Trump.

Previously, on July 31, Trump sent letters to 17 leading pharmaceutical companies with significant market shares in the U.S., including Eli Lilly (LLY.US), Pfizer (PFE.US), and Merck (MRK.US), outlining the steps they should take to lower prices in accordance with the MFN policy, adjusting the prices of their pharmaceutical products in the U.S. market to align with the lower prices in other developed countries.

U.S.-based Gilead (GILD.US), Bristol-Myers Squibb (BMY.US), Johnson & Johnson (JNJ.US), Regeneron (REGN.US), Amgen (AMGN.US), and AbbVie (ABBV.US), as well as European-based pharmaceutical giants Merck KGaA, Sanofi (SNY.US), GlaxoSmithKline (GSK.US), AstraZeneca (AZN.US), Novo Nordisk (NVO.US), Roche (RHHBY.US), and Novartis (NVS.US) also received letters from Trump.

"The president will say that large pharmaceutical manufacturers cannot sell here if they don't sell over there at higher prices. Stop being willing to sell to them at such low prices," Lutnick said in the interview. Trump set a September 29 deadline for pharmaceutical companies to comply with this most-favored-nation policy, and he made the firm statement ahead of that date.

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 also received a call from (Director of the Centers for Medicare & Medicaid Services) Mehmet Oz, and they both said to me, 'Alright, let's get this moving,'" Lutnick added during the interview.

"The president talked about this all day Saturday... He was saying 'we must bring these prices down,'" Lutnick said.

The so-called Most Favored Nation (MFN) policy – where Trump demanded that U.S. drug prices be aligned with "the lowest price in other developed countries," requiring large pharmaceutical companies to ensure that drug prices in the U.S. "do not exceed the lowest levels overseas" – would be enforced through administrative measures.

For the U.S. government, long-term high drug prices bring dual pressures on people's livelihood and fiscal spending. Prescription drug prices in the U.S. have remained excessively high for a prolonged period, leading to rising healthcare expenditure. Therefore, the Most Favored Nation (MFN) approach was seen by the Trump administration as the most direct and quantifiable path to lowering prices, which could quickly benefit patients and reduce federal spending. Additionally, addressing the public's most visible demand for "lower drug prices" could, in the short term, boost public approval ratings for the Trump administration and create positive market expectations.

The higher drug prices in the U.S. are primarily due to the country's long-standing lack of national negotiation or reference pricing (such as the UK’s NICE or Germany’s AMNOG). Branded drugs face almost no price regulation after launch and can repeatedly increase prices. However, with Trump’s return to the White House, he has attempted to change this situation. Other contributing factors include the multi-layered bargaining among commercial insurers, PBMs, and hospitals that determines the "net price." The rebate system incentivizes a preference for drugs with high list prices and high rebates, leading to higher co-pays and out-of-pocket costs for patients and increasing overall price stickiness. Additionally, strong patent protection, exclusivity strategies (patent thickets, patent term extensions), and the lack of direct generic or biosimilar competition further empower manufacturers with greater pricing power.