The threat of tariffs was necessary to get major drugmakers and foreign leaders on board with drug pricing reforms in the US, President Donald Trump has said.
During an address at the World Economic Forum (WEF) in Davos on 21 January, Trump said tariffs were the only way to catalyse the lowering of prescription prices in the US, blaming big pharma’s stubbornness and unfair cost models in other nations. Over the past year, Trump has been executing his Most Favored Nation (MFN) policy, a framework that ties US drug prices to the lowest prices in other developed countries.
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“No president was able [to achieve MFN]. I got it, and other nations approved it, and I had to use tariffs in order to get it, because they said no way,” Trump said.
Trump highlighted a conversation with a friend from London, one which he has previously alluded to in speeches, regarding the cost differences of weight loss medicines in Europe compared to the US.
“[My friend] could buy it for nothing, because basically, America was subsidising every nation in the world because Presidents allowed them to get away with it,” Trump added.
In his first year since returning to the White House, Trump has managed to tie most of the major big pharma players to pricing deals. In return for tariff exemption, the companies have agreed to lower prices for their more popular drugs and promised investment into US manufacturing. Earlier this month, AbbVie became the latest drugmaker to join the roster of MFN deals.
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By GlobalData“It wasn’t easy, by the way. They’re tough, smart. They’ve been getting away with the scam for a long time, but they gave it up,” Trump said.
Providing insight into his negotiations over the past year, Trump unveiled that many pharma companies did not believe that nations would agree to separate price changes. The President announced he had first approached his peer in France, Emmanuel Macron, with the aim of rising drug prices there.
“I actually started with Emmanuel…and I said, Emmanuel, you’re going to have to lift the price of that pill,” Trump said.
When Macron refused the order, Trump said he issued an ultimatum, telling the French president to either agree to US demands or face a sweeping 25% tariff on French products, which would have included wines and champagnes, a main export of the country.
“Without tariffs, I wouldn’t have been able to get [drug price reductions] done,” Trump added.
