The pharmaceutical industry estimates President Donald Trump’s new drug pricing proposal could cost drug companies as much as $1 trillion over a decade, its largest trade group is telling members of Congress.

The idea, first floated last week by the White House as a way to help pay for the president’s tax cut plan, blindsided the pharmaceutical industry and has prompted a furious lobbying campaign.

It’s drawn the industry off the sidelines, with several senior executives preparing to barnstorm Capitol Hill this week, according to nearly a dozen industry lobbyists and consultants who were not authorized to speak publicly about their efforts.

Specifically, the White House asked House Republicans to tie prices for medicines in the Medicaid program to lower prices foreign countries pay, a twist that would cost drugmakers billions of dollars in lost revenue. Trump had explored versions of the proposal before, but its potential application to the program for low-income and disabled people came as a surprise.

The brand-drug lobby PhRMA held an emergency call with its board members on Sunday to discuss its opposition strategy, some of the lobbyists said. The pressure will only ramp up this week as industry executives at some of the world’s largest pharmaceutical companies converge on Washington for a previously scheduled in-person board meeting.

Pharmaceutical executives have largely tread lightly during Trump’s second term as he publicly weighed slapping the industry with tariffs, appointed vaccine skeptic Robert F. Kennedy Jr. to lead the Department of Health and Human Services and empowered the world’s richest man Elon Musk to cut staff at agencies that regulate drugmakers. The so-called “international reference pricing” policy will test the industry’s ability to influence Republicans on Capitol Hill and in the White House.

“Government price setting in any form is bad for American patients. Imposing foreign reference pricing in Medicaid does not save money for patients and could actually cost them more,” PhRMA spokesperson Alex Schriver said in a written statement. Most patient costs for drugs in Medicaid are low, fixed-dollar amounts.

Chief executives of pharmaceutical companies are making calls on Capitol Hill and requesting in-person meetings, these lobbyists and consultants said. One Republican congressional aide who was not authorized to speak publicly on the issue said they heard from seven pharmaceutical companies, consultants and industry groups over the span of day and a half.

Medicaid drug prices are tied to another drug discount program for hospitals, prompting downstream effects. Meanwhile, a spokesperson for the biotechnology lobby BIO said the international drug pricing plan would particularly devastate innovative small- and mid-size biotech companies.

Pharmaceutical companies sold more than $60 billion in drugs through the hospital discount program in 2023, which was a more than 20% increase from the prior year.

Some House Republicans — including Brett Guthrie, the chair of the panel in charge of finding Medicaid cuts — have previously opposed international reference pricing. Guthrie’s concerns with the policy have not changed, a person familiar with the chairman’s thinking said on Tuesday.

Guthrie plans to meet with other Republicans on his committee early Wednesday to make final decisions on the Medicaid changes and other proposals, a committee member said.

There is no formal bill that could provide a basis to estimate exactly how much such a policy could save the federal government. Those savings — likely much smaller than the $1 trillion overall hit to the industry that PhRMA estimates — are important to Republican lawmakers who are scrambling to find a way to fund tax cuts.

Joe Grogan, a former White House domestic policy council chief during Trump’s first term and now a consultant for health care companies, said Trump’s insistence on lowering drug prices and on-shoring drug manufacturing should come as no surprise given his actions during his first term and during the campaign.

“It’s baffling to me that some in industry think he wasn’t serious. He couldn’t have been more clear,” Grogan said.

— With assistance from Billy House