WASHINGTON – President of the United States Donald J. Trump, alongside Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. and CMS Administrator Mehmet Oz, has officially lowered drug prices in the United States through the implementation of the Most-Favored-Nation (MFN) policy.

This policy aims to align the prices of pharmaceuticals in the US with those in other economically comparable developed nations.

“We will no longer allow the American people to pay three to five times more for the same drug than people in other countries,” Kennedy stated in an official HHS release on Tuesday (20/5).

He added, “That ends today. We expect pharmaceutical companies to honour their commitment to lower prices, or we will take action.”

The measure will also cut out intermediaries such as Pharmacy Benefit Managers (PBMs), enabling patients to buy directly from manufacturers at MFN prices—defined as the lowest price in countries with per capita GDP of at least 60% of that of the US, according to OECD standards.

Kennedy cited a stark example of pricing disparity, pointing to GLP-1 medication for diabetes and obesity, which is sold for USD 88 in London but costs USD 1,000 in the US, despite being produced by the same manufacturer and factory. Even after insurance discounts, American patients still pay over USD 400.

“Pharmaceutical companies earn 70% of their profits from the American market, while this country only represents 4% of the world’s population,” Kennedy wrote in an opinion piece for Fox News.

“The global free ride on the backs of American patients must end.”

The government hopes this policy will push manufacturers to set fairer prices and encourage other countries to pay more, so that the US no longer solely bears the cost of funding global medical innovation. According to Kennedy, several American pharmaceutical companies and one foreign producer have welcomed the move.

However, the policy has sparked debate. Stephen J. Ubl, President and CEO of PhRMA, argued that high US prices are primarily caused by other countries not paying their fair share and the role of intermediaries like PBMs.

“PBMs, hospitals, and insurers take half of every dollar spent on medication,” he told medicaleconomics.com on Wednesday (21/5).

In contrast, J.C. Scott, CEO of PCMA, the PBM trade association, blamed pharmaceutical firms for setting high prices, blocking competition, and spending billions on advertising.

“PBMs don’t set drug prices. We just try to mitigate the impact,” he explained.

B. Douglas Hoey, CEO of the National Community Pharmacists Association (NCPA), welcomed efforts to curb the power of PBMs but stressed the importance of preserving the role of local pharmacists in ensuring patient safety.

He supported a more transparent, cost-plus pricing model.

Although the policy is still in its early stages, the government has pledged to follow up with additional regulations if manufacturers fail to comply with MFN pricing. (EF/ZH)