US President Demands Global Price Parity from Major Pharma CEOs
US President Donald Trump has sent letters to 17 top pharmaceutical CEOs, including Novartis's Indian-American head Vasant Narasimhan, demanding they reduce drug prices for Americans. The letters give the companies until September 29 to commit to offering the same prices in the US as they do in Europe and other developed nations. This direct presidential intervention marks a major escalation in the administration's efforts to lower healthcare costs and could significantly impact the global pharmaceutical industry's revenue models.
Unpacked:
Prescription drug prices in the US are typically much higher than in Europe and other developed countries, largely due to limited government negotiation and regulation, whereas many other nations use price controls or negotiation to keep costs down.
Recent US laws, like the Inflation Reduction Act, allow limited government negotiation of drug prices for Medicare, with more extensive negotiation set to begin in 2026. Broader price regulation is uncommon compared to other countries.
Pharmaceutical companies have historically resisted US price controls, arguing they would limit innovation and reduce access. Industry lobbying and legal challenges have often slowed or weakened regulatory measures.
If US prices dropped to European levels, pharmaceutical companies could see significant revenue declines, possibly leading to changes in global pricing strategies, reduced R&D spending, and pressures on healthcare systems worldwide.