US Demands Global ‘Fair Share’ for Pharma R&D to Cut American Drug Prices

The U.S. government is escalating its efforts to rectify a perceived imbalance in global pharmaceutical research and development funding, contending that American consumers are shouldering an undue share of innovation costs. This initiative seeks to recalibrate drug prices, advocating for wealthier nations to contribute more substantially to the pharmaceutical industry’s R&D expenditures, which have historically relied heavily on the U.S. market. The administration frames this position as part of a wider economic and trade strategy aimed at securing “fair share” contributions from international allies.

• The U.S. government aims to rebalance global pharmaceutical R&D funding, asserting American consumers bear disproportionate costs.
• White House officials claim Americans, despite being 5% of the global population, contribute 75% of pharmaceutical companies’ profits.
• President Trump has dispatched letters to pharmaceutical CEOs demanding immediate action on drug prices.
• AstraZeneca CEO Pascal Soriot acknowledged the U.S. role in R&D funding and supported equitable cost-sharing among wealthy nations.
• The administration has set a September 29 deadline for companies to respond with repricing plans or engagement proposals.

The Administration’s Push for Price Rebalancing

President Donald Trump has directly engaged leaders within the pharmaceutical sector, sending letters to numerous CEOs to demand immediate action on what he terms “vastly inflated drug prices.” White House officials underscore a significant disparity: despite comprising only 5% of the global population, Americans reportedly account for approximately 75% of pharmaceutical companies’ profits. This dynamic, they argue, compels U.S. patients to pay substantially more for identical medications readily available at lower prices in other affluent nations. The administration characterizes this as an unsustainable “freeriding” arrangement by foreign countries, signaling its firm resolve to rebalance the economic burden.

Industry Response and Commitment

Support for this rebalancing initiative has emerged from within the pharmaceutical sector itself. Pascal Soriot, CEO of AstraZeneca, recently acknowledged in an interview the pivotal historical role the U.S. has played in funding the industry’s research and development. While recognizing the resultant benefits to American patients and the creation of jobs within the U.S., Soriot affirmed the principle that R&D costs should be equitably shared among wealthy nations, particularly those with robust GDPs in Europe or Japan. Amidst these policy shifts, AstraZeneca has recently underscored its continued engagement with the U.S. market by committing to a substantial $50 billion investment in the United States over the next five years.

Regulatory Oversight and Proposed Adjustments

The Trump administration intends to utilize the authority of the U.S. Trade Representative’s Office and the Commerce Department to oversee progress in rebalancing medication prices. While officials favor a voluntary, cooperative approach with pharmaceutical companies to adjust their cost structures, they have indicated a readiness to implement mandatory regulatory processes should it prove necessary. This strategy is framed not as punitive, but as an extension of international collaboration, urging other countries to share the financial responsibility for groundbreaking medical advancements.

Targeted Companies and Policy Directives

Major pharmaceutical companies, including Pfizer Inc., Eli Lilly & Co., Gilead Sciences Inc., and Amgen Inc., have received direct communications from President Trump regarding these pricing concerns. The administration has identified four key areas for these companies to implement changes aimed at reducing drug costs for American consumers:

• Extending Most Favored Nation (MFN) pricing to Medicaid, ensuring the lowest available global price for a drug is applied to this program.
• Guaranteeing MFN pricing for newly launched medications, preventing higher initial prices in the U.S. market compared to other nations.
• Returning increased revenues generated abroad from any price rebalancing efforts directly back to American patients, potentially through rebates or other mechanisms.
• Facilitating direct-to-consumer or direct-to-business distributions to eliminate intermediaries and reduce the overall cost burden.

The administration has imposed a deadline of September 29 for pharmaceutical companies to submit their proposed plans for repricing or to initiate engagement with government assistance programs designed to facilitate these implementations.