Aug 20, 2025
Most Americans would be happy to pay less — a lot less — for their prescription medications.
KFF research found that six in 10 American adults take at least one prescription drug, yet a quarter struggle to afford their medication. Another three in 10 say they haven’t taken their medication as prescribed because of the cost.
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And a survey from GoodRx Research found that almost 30% of respondents cut back on spending for food or clothing to pay for their prescriptions. Of those who filled a prescription this year, one in five reported rationing their medications (again, because of cost).
U.S. President Donald Trump has promised to reduce those prices — by 500% to 1,500%. But is that even possible?
A timeline of events
On May 12, Trump signed an executive order stating that U.S. consumers are being overcharged for prescription drugs and that “Americans must therefore have access to the most-favored-nation price.” (Most-favored-nation, or MFN, refers to the lowest price for a drug when selling abroad.)
The day before he signed the executive order, Trump posted on Truth Social that drug prices would be reduced almost immediately, by 30% to 80% (that hasn’t happened yet). On July 22, in a reception with members of Congress, he said he would get drug prices down even further.
“We will have reduced drug prices by 1,000%, by 1,100, 1,200, 1,300, 1,400, 700, 600 — not 30 or 40 or 50% but numbers the likes of which you’ve never even dreamed of before,” he told members of Congress.
Then, on July 31, Trump sent letters to the heads of 17 major pharmaceutical companies calling on them to make widespread changes.
A White House fact sheet outlined the steps listed in these letters, which include providing MFN prices to all Medicaid patients and requiring drug manufacturers to “stipulate that they will not offer other developed nations better prices for new drugs than prices offered in the United States.”
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Trump also wants to use trade policy “to support manufacturers in raising prices internationally provided that increased revenues abroad are reinvested directly into lowering prices for American patients and taxpayers,” according to the fact sheet.
The letters inform the 17 pharmaceutical companies that if they don’t comply, the federal government “will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.” However, there are no specifics on how this would be done.
While the fact sheet doesn’t mention the 500% to 1,500% price reduction, cutting prices to MFN levels would technically be a 66% reduction, according to a Forbes article.
Pharmaceutical company Eli Lilly responded by issuing a statement that it would raise prices in European countries to “align” them with the costs paid “across developed countries.” So while Europeans may see their drug prices go up, Americans may not see prices go down, either.
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Why Americans pay more for drugs
Americans do pay for more drugs — nearly three times the average of other industrialized nations that are members of the Organization for Economic Cooperation and Development (OECD).
“We found that U.S. manufacturer gross prices for drugs in 2022 were 278 percent of prices in the 33 OECD comparison countries combined,” according to a study by Rand Corp., a nonpartisan research organization, which analyzed data for all prescription drugs available in OECD countries.
“Put another way, prices in other countries were 36 percent — or a little more than one-third — of those in the United States” for identical drugs, according to the study.
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However, this isn’t anything new. Trump under his first term, and then former president Joe Biden, attempted to tackle this issue, with little success. In part, that’s because the U.S. has a large, complex private insurance industry alongside publicly funded Medicare and Medicaid.
Most OECD countries “have achieved universal or near-universal coverage for a core set of health services,” according to the OECD. And many have nationalized, publicly funded healthcare systems.
In countries with centralized health care, “officials can negotiate blanket rates for drugs, and in some cases refuse to buy if they deem the price too high,” according to an article published by the BBC, which also notes that if drugs are taxed coming into the U.S. (via tariffs) that would further increase drug costs for Americans.
Often, if another country finds that the cost of a new drug “isn’t justified by improved results, they’ll reject the drug application,” according to an article published by PBS News. “Some countries also set price controls.”
How much could drugs be reduced?
The day before he signed the executive order in May, Trump posted on Truth Social that drug prices would be reduced by 30% to 80%.
“Experts said Trump’s action could potentially lower the cost of prescription drugs, perhaps by the 30 percent to 80 percent scale Trump said, but they cautioned that the order’s required procedural steps would make it far from an immediate fix,” according to the PBS article.
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But there’s no clarity on how the price of prescription medication could be reduced by up to 1,500%. It’s also not clear which drugs would be impacted or if costs would show up elsewhere.
“Getting a 1,500% price reduction would presumably mean that pharmaceutical companies would be paying you to take their medications not just a little but a lot,” wrote senior contributor Bruce Y. Lee in Forbes.
“Getting pharmaceutical companies to do that is probably something you have never even dreamed of before, since for-profit pharmaceutical companies are usually trying to make, you know, a profit,” he wrote.
In the U.S., M&A activity in the pharmaceutical and biotechnology industry means there’s less competition, giving consumers less choice. At the same time, the industry has seen cuts in funding for research, exacerbating the lack of competition.
A “single simple intervention probably has a small percentage chance of reducing drug prices in a sustainable manner,” according to Yee in Forbes. Rather, he says “more of a system approach may be needed, where multiple interventions are implemented at different points in the system so they work together in a coordinated manner.”
The letters were sent to AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron and Sanofi.
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Vawn Himmelsbach is a veteran journalist who covers tech, business, finance and travel. Her work has been featured in publications such as The Globe and Mail, Toronto Star, National Post, CBC News, Yahoo Finance, MSN, CAA Magazine, Travelweek, Explore Magazine and Consumer Reports.
