U.S. President Donald Trump is trying to revolutionize his nation’s pharmaceutical industry as he sent letters to 17 major drug companies, ordering them to lower the pharmaceutical prices to match the price in other nations or face consequences.
Back in May, Trump signed an executive order, demanding U.S. drugmakers to slash their medicine prices. He is now taking a similar action with the same goal of turning the U.S. into the nation that provides the lowest possible drug prices among the members of the OECD.
The U.S. is among the nations that charge the highest medical prescriptions. Its patients often pay three times higher than other developed nations. Still, it also invests significantly in this industry’s research and development. Many fear that pharmaceutical advancement will be halted.
Besides price cuts, Trump also demands these companies to return excess overseas revenue, generated from the high drug prices they charged in other nations to compensate for the loss after cutting the U.S. drug price, and promise not to provide other nations better prices.
Following the announcement, the share of a few major pharmaceutical companies fell. Some have already announced their intentions to collaborate with the Trump administration. These included Pfizer, Novartis, AbbVie, Merck KGaA’s U.S. division, and EMD Serono.
Although Trump gave these drug companies a deadline to respond by September 29 or face response measures, experts and analysts speculated that these companies will unlikely comply. UBS analyst Trung Huynh stated that Trump’s action is just a repeat of previous demands and unlikely to affect the industry.
