Payam Javan: President Donald Trump has set a 60-day deadline for 17 leading pharmaceutical companies to implement “Most Favored Nation” drug pricing, a policy aimed at lowering prescription drug costs for Americans. In letters sent to the CEOs of these companies, Trump announced his intention to use “every tool” available to combat what he calls “abusive drug pricing practices.” This move follows up on a May 12 executive order where he asked companies to voluntarily offer the lowest prices available to other countries, citing that American consumers pay more than double the average price for medications compared to the rest of the world. The new letters demand “binding commitments” from the drugmakers to make these changes by September 29.

The pharmaceutical industry, represented by Stephen J. Ubl of the Pharmaceutical Research and Manufacturers of America, has pushed back against the president’s demands. While agreeing that Americans pay too much for drugs, Ubl blames middlemen and a lack of transparency for the high costs. He also warned that forcing companies to lower prices could hinder research and development, potentially slowing the creation of new medications. However, advocacy groups like Patients for Affordable Healthcare have cited data suggesting that such policies would have a minimal impact on R&D. The president’s plan targets prices paid by the federal government, primarily through Medicare and Medicaid, which spend over $80 billion annually on prescription drugs.