Trump sets 60-day deadline for US pharma price reductions

By 29 September, prices in the US biopharma market are expected to be substantially reduced. The top 17 pharmaceutical corporations generated approximately 44% of the global revenue for prescription medicines (Rx) in 2024, amounting to US$753.6bn of the US$1.7tr global market. For foreign companies such as Novartis, Sanofi, GSK, Boehringer Ingelheim and Roche — which face not only the required price cuts but also import tariffs of an estimated 15% or more — the US revenue share typically ranges between 30% and 40%. US-based manufacturers derive more than 60% of their annual revenue from the US market.

Trump had already emphasised in May that US prices for prescription drugs are up to three times higher than in countries with drug price regulation, describing this as unfair when he signed the executive order entitled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients”. By the end of his ultimatum, Trump demands a clear commitment from pharmaceutical companies, which are already in discussions with the US administration, that all medicines will be offered in the US only at the lowest international price. He stated that American families must be relieved immediately. While drug prices in Europe are heavily regulated, the US government exerts limited influence over medication pricing, which is why prices there are significantly higher than elsewhere.

Should companies refuse, his administration will “use all available means” to protect the public from “abusive pricing policies”. Trump argued that pharmaceutical firms have profited excessively at the expense of American innovation and must now pay their “fair share”.

The companies affected include Johnson & Johnson (2024 global/US revenue: US$88.8bn/US$50.3bn), Roche (US$65.3bn/US$20–25bn), Merck & Co. (US$64.2bn/US$38–40bn), Pfizer (US$63.6bn/US$40bn), AbbVie (US$56.3bn/US$33–35bn), AstraZeneca (US$54.1bn/US$23.8bn), Novartis (US$50.3bn/US$15–18bn), Bristol Myers Squibb (US$48.3bn/US$30bn), Eli Lilly (US$45bn/US$25–30bn), Sanofi (US$44.5bn/US$13–16bn), Novo Nordisk (US$41.7bn/NA), GSK (US$40.1bn/US$12–14bn), Amgen (US$33.4bn/US$25bn), Boehringer Ingelheim (US$29bn/US$9–11bn), and Gilead Sciences (US$28.8bn/US$18–20bn).

Following Trump’s threat to impose tariffs on pharmaceuticals and raw materials produced abroad, Swiss companies Roche and Novartis announced in April plans to invest US$50bn and US$23bn respectively in US manufacturing facilities by 2030. However, Roche moderated this commitment after Trump’s price reduction campaign, stating that sufficient funds might not be available for US infrastructure investment if prices are cut. Roche’s CEO Thomas Schinecker has since adopted the same argument in negotiations on drug prices. He stated that a 50% price reduction in the US would be feasible if Trump, following his own proposal, allowed trade to bypass pharmaceutical wholesalers in favour of direct sales to pharmacies. However, this faces opposition from the influential Pharmacy Benefit Managers (PBMs), which control around 80% of the US Rx drug market and generate more than US$440bn in revenue. These PBMs, along with pharmaceutical wholesalers, manage the complex tracking and logistics chain for medicines.

Additionally, there remain questions regarding how Trump’s minimum prices (the “Most Favoured Nation” price) will apply to new drugs, which are usually first launched in the US market and thus have no reference price for the lowest international cost.

“The announced introduction of US tariffs amounting to 39% on Swiss products from 7 August 2025 is neither economically nor security-wise justified. The chemical and pharmaceutical industry – a key pillar of Switzerland’s export economy – is also affected,” stated scienceindustries, the business association representing the Swiss chemical, pharmaceutical and life sciences industries. A reversal or softening of the measures is urgently needed. According to study indicators, Switzerland’s pharmaceutical sector is just as productive in terms of drug innovation as the US cluster in Boston.