Each year, more than nine million people in the United States do not take their medicines as prescribed owing to cost concerns. People there pay up to four times as much for new medicines as do individuals in other high-income countries.
US President Donald Trump announced a deal with pharmaceutical giant Pfizer on 30 September, aimed at improving the affordability of drugs for people in the country. This is the first concrete step under Trump’s ‘most-favoured nation’ policy, which intends to align US medicine prices to those in other wealthy countries. But it is unlikely to deliver the promised reductions in drug costs, and the knock-on effects could adversely affect public health globally.
As part of the deal, some of Pfizer’s drugs will be offered in the United States through a direct-to-consumer website, referred to as TrumpRx, that is expected to launch in 2026 — cutting out intermediaries and securing lower prices.
Yet this probably won’t benefit the 92% of people with health insurance, who would be better off receiving medicines through their plans. And those who can’t afford insurance probably won’t be able to pay for expensive drugs either. For example, even with the agreed discount, Pfizer’s anti-inflammatory drug tofacitinib (sold under the brand name Xeljanz) will cost about US$3,600 a month.
Claims that the deal will lower prices paid by Medicaid — a government programme providing health insurance to people with limited incomes and resources — have also been met with scepticism, because there is no evidence that it will improve on existing discounts. And from a financial perspective, the deal is not expected to affect pharmaceutical companies substantially. Pfizer’s stock price rose by nearly 15% in the five trading days after the announcement.
Trump’s wider aim is to stop the ‘global freeloading’ of other high-income countries that, he says, benefit from low prices while accessing innovative drugs, the development of which has been funded mainly by US consumers. He argues that lowering prices in the United States and raising them elsewhere would be fairer and preserve industry revenues to support investments in research and development (R&D). But other wealthy nations shouldn’t be expected to make up for any shortfall in US industry revenues.
Directly linking what the US population pays to prices in other high-income countries, as proposed by Trump’s policy, might not be effective. Given the importance of the US market to the drug industry, strategies exist to avoid prices in other nations influencing those in the United States — private non-transparent agreements between pharmaceutical companies and health systems, for example. Firms could also decide not to sell their products in some countries to protect US revenues.
It is too early to gauge how effective the Trump administration’s mix of diplomatic pressure and tariff threats will be in persuading other governments to accept higher drug prices. But if the United States is even partially successful, the increased medical bill for other wealthy nations could severely compromise their ability to fund broader health priorities, not just new drugs. And the idea that such higher prices would be fair is misplaced. In England, for example, the population is already paying too much for medicines despite relatively stringent price regulations.
Instead, to reduce drug costs, the United States must develop its own mechanism for price regulation. It could, for example, use approaches that directly tie drug prices to rigorous value assessments, such as those undertaken by the Institute for Clinical and Economic Review, an independent non-profit organization in Boston, Massachusetts. This would require the Trump administration to engage with the complexity of the US market, in which high costs reflect a complex web of intermediaries and legal barriers to price negotiation. For example, despite reforms, Medicare — the US health-insurance programme for people aged 65 years and older — is allowed to negotiate drug prices for only a limited number of expensive drugs.