Exclusive: Lutnick says Trump will force drugmakers to lower prices
Add Axios as your preferred source to
see more of our stories on Google.
President Trump is turning up pressure on drugmakers to lower prices and demanding they commit within weeks to his "most-favored nation" policy, Commerce Secretary Howard Lutnick tells Mike Allen in the premiere episode of "The Axios Show."
Why it matters: The initiative — which calls for charging the U.S. less for drugs than comparable countries — continues Trump's efforts to reshape drug pricing through threats and public shaming.
- It also raises the stakes for pharmaceutical manufacturers as they face threatened tariffs.
- "The Axios Show" is our new series featuring our top reporters and experts interviewing newsmakers shaping politics, media, business, tech and culture. The full episode with Lutnick is out today.
What they're saying: "The president's going to say that you drug manufacturers cannot sell here unless you sell there at a higher price. Stop being willing to sell to them at such a low price," Lutnick said.
- Trump says having the EU and other nations pay more for pharmaceuticals would lower the proportion of research and development costs borne by American consumers.
Between the lines: The action is as much about sticking it to the European Union and other countries that set lower drug prices for their citizens as it is about going after the pharmaceutical industry.
Context: Trump sent letters in July to the CEOs of 17 large companies, including Novo Nordisk, Eli Lilly, GlaxoSmithKline, AbbVie and Pfizer, demanding a "binding commitment" on price reductions, bringing manufacturing back to the United States and direct-to-consumer sales by the end of this month.
- Lutnick said Trump is mobilizing executive branch agencies to turn up the pressure.
- "I just got the call from [Health Secretary] Bobby Kennedy. I got a call from [CMS Administrator] Mehmet Oz and said, 'OK, let's get to work on this,'" Lutnick said.
- "The president was talking about this all day on Saturday. ... He was talking about 'we got to drive these prices down.'"
Lutnick recalled the high drug costs he faced while being treated for non-Hodgkin lymphoma, and said international pricing parity could save Medicaid, Medicare and the public $1 trillion.
- "I mean, they're great American companies, but they sell for $1,000 here and $200 overseas. Come on, that's got to change. Let's get them all to 500 bucks and we're all better off," Lutnick said.
The other side: "Importing foreign price controls would undermine American leadership, hurting patients and workers," said Alex Schriver, senior vice president of public affairs at PhRMA, the drug industry trade group.
- "To reduce price differentials with other countries, policymakers should rein in health care middlemen driving up costs for Americans and get foreign countries to pay their fair share for innovative medicines," he said.
Reality check: Trump proposed a version of the most-favored nation policy in his first term, but it got bogged down in legal challenges from the drug industry and never took effect. Drug companies are also certain to sue to stop any similar moves this time.
- The administration would have a stronger hand if Congress acted to implement a most-favored nation policy, but Republicans in Congress have so far resisted Trump's efforts to pass it legislatively.
What we're watching: Whether manufacturers will bow to Trump's demands or make piecemeal concessions, like extending rebates in Medicaid and lower launch prices on some new drugs.
- If the administration decides that isn't enough, it could take a more hard-line approach to the next round of Medicare drug price negotiations.
