Donald Trump vows to lower US drug prices by up to 80%

Unlock the White House Watch newsletter for free

Your guide to what Trump’s second term means for Washington, business and the world

US President Donald Trump plans to use his executive powers to force pharmaceutical companies to drastically reduce the cost of drugs, despite fierce opposition from the industry and some senior Republicans.

In a social media post on Sunday evening, Trump said he would sign an order on Monday that would reduce prices “almost immediately by 30 per cent to 80 per cent”.

He added that the US would introduce a “most favoured nation” policy, “whereby the United States will pay the same price as the nation that pays the lowest price anywhere in the World”.

Asian pharmaceutical stocks dropped on Monday on the back of the news, with shares in Samsung Biologics, SK Biopharmaceuticals and BeiGene down 4 per cent, 2.5 per cent and 7.9 per cent, respectively. In India, Sun Pharma fell more than 5 per cent to lead losses on the benchmark Nifty 50 index.

Trump attempted a similar move during his first term in office, but it failed to progress amid strong resistance from the pharmaceutical industry.

The US president suggested on Sunday that he would see off any similar opposition from the sector, despite large pharmaceutical groups and trade bodies having made donations to his inauguration.

“Campaign Contributions can do wonders, but not with me, and not with the Republican Party,” Trump wrote. “We are going to do the right thing, something that the Democrats have fought for many years.”

Responding to the proposed executive order, industry lobby group PhRMA said “government price setting in any form is bad for American patients”. It added that “to lower medicine costs for Americans, we should address the growing share of medicine costs going to middlemen in the system.”

The group was one of several representative bodies that sued the last Trump administration for trying to restrict drug prices, eventually leading Joe Biden’s White House to drop the proposals entirely.

The Biden administration subsequently inserted a drug negotiation provision into the Inflation Reduction Act, targeting 10 specific medicines in a move that was estimated to save almost $100bn over 10 years.

The move also prompted a slew of lawsuits from the pharmaceutical industry, but most have been unsuccessful.

The sector has also waged a public-relations campaign, claiming such schemes discourage innovation and reduce research spending.

Trump rejected the claims in his post, writing that drugs companies “would say, for years, that it was Research and Development Costs, and that all of these costs were, and would be, for no reason whatsoever, borne by the “suckers” of America, ALONE”.

He claimed that as a result of the expected order, “our country will finally be treated fairly”.

White House officials have reportedly tried to force a drug price reduction provision into a looming budget bill, but faced pushback from senior Republicans including House Speaker Mike Johnson.

Additional reporting by William Sandlund in Hong Kong