Trump pushes 'Most Favoured Nation' plan to slash US drug prices, defends tariff policy
President Trump announced his plan to lower prescription drug prices in the US through the "Most Favoured Nation" pricing model, aiming to match the lower prices found in European nations. He has been pressuring pharmaceutical companies to comply, threatening penalties if they don't offer lower prices to US patients, particularly Medicaid enrollees, within 60 days.
ANI Representative Image US President Donald Trump on Sunday (local time) said he aimed to cut pharmaceutical drug prices through the "Most Favoured Nation" prescription drug pricing plan.Speaking to reporters before boarding Air Force One in Allentown, Pennsylvania, Trump said the US would pay the lowest drug prices, similar to those in European nations."We want the same price as Europe gets. We want the same price as other countries get ... We will pay as low as the lowest nation in the world. The next big move is going to be the price of drugs because you could buy something in London or in Germany... sometimes 1/10th the price of what it costs to buy it in New York... We're not doing that anymore," he said.Trump has been pressuring major drugmakers to align US drug prices with those available abroad, but industry experts told CNN they do not expect pharmaceutical companies to comply.On Thursday, Trump sent letters to CEOs of 17 major pharmaceutical firms, demanding they extend "Most Favoured Nation" pricing—the lowest price paid for a drug in a peer country—to all drugs supplied to Medicaid enrollees. He gave the companies 60 days to comply.
This directive follows an executive order Trump signed in May, requiring drugmakers to offer lower prices to US patients or face penalties.Meanwhile, Trump defended his tariff policy, saying it would help reduce national debt. "We're going to pay down debt. We have a lot of money coming in, much more money than the country's ever seen, by hundreds of billions of dollars... we should've done this many years ago," he said.
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Because of this, I will be substantially raising the tariff paid by India to the USA,' Trump said in a post on his social media platform, Truth Social. Rating agency ICRA said that the higher-than-expected US tariffs on India — and the potential penalty linked to India's crude and defence purchases from Russia — are likely to pose a headwind to India's GDP growth in the current fiscal. 'We have lowered our growth forecast for India for FY2026 by 20 basis points to 6.0 per cent; the extent of the said penalties could result in a further downside,' the agency said. Simon J Evenett, Professor of Geopolitics and Strategy at the International Institute for Management Development (IMD), an independent academic institute in Switzerland, said in a LinkedIn post that tariff threats against India have 'nothing to do with economics'. He said that the United States has now antagonised all five of the original BRICS nations, home to more than 3.2 billion people. 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As Trump has threatened several countries with additional tariffs over the re-routing of goods to the US, Deborah Elms, a trade and economic policy expert with the Hinrich Foundation, said in a LinkedIn post that one key complaint from the business community is the lack of clarity on what the US currently means by 'transshipment'. 'Given that tariffs are about to be 40 per cent on anything deemed to be transshipped, definitions are critically important. Typically, firms are required to 'substantially transform' products. In other words, you aren't allowed to simply take a box, slap a new label on it saying 'from country X', but must take raw materials, parts, and components to create something transformed. The amount of transformation is critically important. In a free trade agreement, officials spend months or years wrangling over these rules. Is there a value threshold that needs to be crossed? Is it a change in tariff heading? Subheading? Unfortunately, with new tariffs coming on August 7, we have no guidance at all on these rules,' Elms said. Ravi Dutta Mishra is a Principal Correspondent with The Indian Express, covering policy issues related to trade, commerce, and banking. He has over five years of experience and has previously worked with Mint, CNBC-TV18, and other news outlets. ... Read More
