Debate over drug pricing in the U.S. has become a battleground for deeper structural tensions—between national sovereignty and global trade, consumer protection and corporate profit, and political theater and policy substance.
Critics argue that the Trump Administration’s new Most Favored Nation executive order—to impose international reference pricing on pharmaceuticals sold through federal programs—is a form of price control that could stifle innovation and limit patient access. They argue it also ignores the main drivers of inflated drug costs—insurance companies and pharmacy benefit managers.
Meanwhile, the pharmaceutical industry has failed to convince enough Americans—especially President Trump—that the current expensive system is working for those who need the industry’s products. The result is a standoff where the public is caught between opaque pricing systems, broken incentives, and a global market that offloads development costs onto American taxpayers.
According to Peter Pitts, this should all change. He is founder and president of the Center for Medicine in the Public Interest and former FDA Associate Commissioner. He has long advocated for patient choice, intellectual property protections, and reforms in America’s healthcare system. He believes the recent executive order misses the mark.
“It’s strange they call it ‘most favored nation’ because none of these nations are doing us any favors,” Pitts says. “They’re allowing America to carry the full burden of drug development… billions and billions of dollars without doing any heavy lifting at all.”
He argues that what’s being portrayed as a move toward fairness actually imposes misguided price controls that could backfire on American consumers.
For Pitts, the issue boils down to economic fundamentals and patient access. “Price controls equal choice controls,” he warns. “We don’t want Uncle Sam calling doctors and patients to tell them what kind of treatments they can get like they do in Europe.”
Although the executive order is focused on drugs covered by government programs—Medicare, Medicaid, VA, Tricare—Pitts says that even this carveout could have ripple effects across the system.
“When Americans say, ‘My drugs are too expensive,’ what they really mean is ‘My copay is too expensive,’” Pitts says. “Pharmaceutical companies don’t set those copay rates. Big insurance companies do.”
He stresses that the system’s real inefficiencies lie not with manufacturers, but with insurers and especially pharmacy benefit managers (PBMs), whom he calls “middlemen pulling billions of dollars out of the system every year.”
He notes that while pharmaceuticals account for about 11% of total U.S. health care costs, they remain one of the few expenses where Americans directly pay at the point of care. “It’s the only part of health care where Americans actually reach into their pockets,” he says. “We’ve got to help lower those copays.”
What’s missing in the executive order, according to Pitts, is any real mechanism to force foreign countries to pay more. “The American public is getting screwed, and the rest of the world is getting a free ride at our expense,” he says. He sees this as an international trade issue, not just a domestic policy matter, and calls for tough negotiations with foreign governments rather than price caps at home.
Still, he’s skeptical that either political party is willing to act decisively. “Everybody else in the middle is unsure what to do because they can’t agree with the president,” he says. “They’ve boxed themselves into a policy corner where anything the president says, they can’t be for it.”
According to Pitts, the industry’s silence has become part of the problem. “The president wants a victory and he’ll get it one way or another,” he says. “Pharma can’t just keep saying no–they need to have an alternative, and they haven’t played that card yet.”
The executive order’s ambiguity adds to the confusion, he says. He notes the absence of the word “Medicare” in the order’s text despite widespread speculation that it will affect Medicare pricing. While the president has threatened measures like revoking drug licenses, Pitts says, “Of course, it’ll never happen because it’s against the law.” But, he says, “the fact that the president’s even verbalizing that should send a signal.”
Pitts insists that the basis of effective reform starts with identifying who’s profiting most from inefficiencies. “PBMs were once useful, but now they’re a boondoggle,” he says, citing testimony from former executives who claimed costs could drop by 50% if PBMs were removed from the equation. He also criticizes abuses within the 340B program, where large hospital systems buy discounted drugs meant for underserved populations and sell them at full price to insured patients.
Pitts and Rich Bagger, a former Pfizer executive and current New Jersey lawmaker, are developing a policy proposal that would shift the conversation toward trade negotiations rather than price controls. “The harder part was to figure out a way to present trade negotiations as the next step, and that’s really what we did,” Pitts says.
He stresses that the U.S. cannot simply walk away from international drug markets due to the life-saving nature of pharmaceuticals. But that doesn’t mean America should accept the current imbalance. “We need a global discussion,” he says, “not just something the U.S. taxpayer has to suck up on their own.”
Still, Pitts acknowledges the political realities. “Both parties use pharma as a punching bag,” he says. “It’s easy to make pharma the boogeyman.” Yet despite its importance to public health, the industry struggles to defend itself. “They’re great at selling their products,” Pitts says, “but absolutely the reverse when it comes to standing up for themselves.”
He advises the pharmaceutical industry to match their product marketing budgets with equal investments in public education. “Joe Consumer is also Joe Voter,” he says. “They need to go directly to the American people.”
“Kudos to the president for pushing for a solution,” he says. “The old rulebook doesn’t work anymore.” According to Pitts, “the industry needs to wake up and get with the program—help everybody, including themselves.”
