By Tami Luhby, CNN

(CNN) — President Donald Trump recently made his boldest claim yet in his longstanding promise to lower drug prices.

“You know, we’ve cut drug prices by 1,200, 1,300 and 1,400, 1,500%,” he told reporters on Sunday, noting the reductions will start over the next two to three months. “I don’t mean 50%. I mean 14- 1,500%.”

Trump has unveiled a number of moves aimed at cutting drug prices in recent months, but he has yet to move the needle on reducing costs – much less slashing them by 1,500%, which is mathematically impossible, experts say.

Just how much Trump will be able to accomplish is a matter of debate.

“The administration, by itself, has relatively limited power to affect drug prices across the US market,” Benedic Ippolito, a senior fellow in economic policy studies at the right-leaning American Enterprise Institute, told CNN. “Congress has tons of power, but the administration, if they’re acting by themselves, there’s just only so much they can do.”

Still, Trump’s comments are signaling “strong political will,” and it would be unwise for drugmakers to dismiss them, said Milena Sullivan, policy practice director at Avalere Health, a consulting firm with pharmaceutical companies as clients.

“President Trump already has a track record of disruptive policymaking and a willingness to push the limits,” she told CNN. “The rhetoric has only been intensifying. Even if the math doesn’t make sense, the political message is serious.”

Trump’s main effort, which he cited on August 3, centers on getting drugmakers to offer the same price in the US as they do in Europe and other peer countries, the so-called “Most Favored Nation” price. The US paid nearly three times as much for medications as did comparable countries in 2022.

The president tried to force this policy on the pharmaceutical industry near the end of his first term, finalizing a rule for a model program in which Medicare would pay the “Most Favored Nation” price for 50 drugs administered in doctors’ offices. But the initiative was quickly blocked in court on procedural grounds and later rescinded by the Biden administration.

Now, Trump is pushing drug manufacturers to voluntarily offer US patients the lowest price paid for a drug in a peer country or face repercussions.

“Big Pharma will either abide by this principle voluntarily or we will use the power of the federal government to ensure that we are paying the same price as other countries to accelerate these price restrictions and reductions,” the president said in May when signing an executive order on “Most Favored Nation” pricing.

Some potential ramifications include directing the Department of Health and Human Services to craft a rule implementing the policy, allowing more drug importation into the US, reviewing drug exports and having the Food and Drug Administration modify or revoke approvals granted for drugs that may be “unsafe, ineffective, or improperly marketed.”

But subsequent discussions between HHS and the drugmakers have not yielded the results Trump wants, prompting him to publicly ratchet up the pressure. He wrote letters late last month to 17 major pharmaceutical company CEOs, which were posted on Truth Social and read aloud at a White House briefing.

In the letters, Trump calls for manufacturers to extend “Most Favored Nation” pricing to all drugs provided to Medicaid enrollees. Also, he is demanding that the companies guarantee that Medicaid, Medicare and commercial-market insurers pay such prices for all new drugs.

“Moving forward, the only thing I will accept from drug manufacturers is a commitment that provides American families immediate relief from the vastly inflated drug prices and an end to the free ride of American innovation by European and other developed nations,” he wrote, giving the companies 60 days to comply.

Asked for comment on Trump’s claim on reducing drug prices by 1,500%, White House spokesman Kush Desai said in a statement to CNN, “It’s an objective fact that Americans are paying exponentially more for the same exact drugs as people in other developed countries pay, and it’s an objective fact that no other Administration has done more to rectify this unfair burden for the American people.”

Tariffs could raise prices

Trump is also pursuing other initiatives in the pharmaceutical industry arena – including tariffs, which could raise drug prices and worsen shortages of generic medicine over time. Trump excluded the industry from the tariffs he imposed during his first term.

The president has already agreed to the framework of a deal with the European Union, which would levy a 15% tariff on drug imports, with some exceptions for certain generic drugs. And the administration launched an investigation into national security implications of pharmaceutical imports, which are expected to lead to tariffs on the sector.

Trump has said the levies – which could be as much as 250% but implemented gradually over time – will be announced shortly. (The EU and US have both said that the sectoral tariffs would not apply to drug imports from Europe, but the trade deal has yet to be finalized.)

The tariffs are designed to spur more domestic drug manufacturing, and Trump’s threats have prompted a bevy of pharmaceutical companies to announce billions of dollars of investments in their US operations. But that’s still not likely to provide Americans with a break on their drug costs since the prices they pay are largely governed by the nation’s complex health system, which includes manufacturers, insurers and pharmacy benefit managers, known as PBMs, experts said.

Trump has also supported PBM reform, which Congress has also pursued but never passed. And he favors having drug makers sell their certain medications directly to consumers at “Most Favored Nation” prices, cutting out other players in the supply chain that can keep costs elevated.

The administration is also looking at reducing Medicare reimbursements to certain hospitals so the payments are more in line with the providers’ discounted acquisition costs for Part B drugs administered by doctors. This would lower patients’ out of pocket costs since they are tied to Medicare’s reimbursement rates. An effort to do this in his first administration was knocked down by the Supreme Court on procedural grounds.

The more meaningful policies need time to implement and will likely involve other players in the drug supply chain, Sullivan said.

“The political signals are that any viable solution has to tackle holistically how drugs are priced and delivered in this complex health care system,” she said. “So it’s not just the manufacturers that are feeling some of the pressure at the moment.”

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