Trump Secures Deals With Nine Pharma Firms To Lower US Drug Prices, Avert Tariffs

Image Source: Pexels US President Donald Trump announced deals with nine major pharmaceutical companies on Friday to lower US drug prices in exchange for three-year exemptions from threatened tariffs on pharmaceutical imports.The agreements bring the total number of drugmakers aligned with Trump’s pricing initiative to 14 of the 17 companies the administration targeted this year.The latest round represents the largest pharmaceutical pricing agreement announced to date, covering price reductions on treatments for diabetes, rheumatoid arthritis, multiple sclerosis, asthma, COPD, hepatitis B and C, HIV, and certain cancers.Nine firms join Trump’s drug-price plan The nine companies announcing deals on Friday are Amgen (AMGN), Boehringer Ingelheim, Bristol Myers Squibb (BMY), Genentech (Roche), Gilead Sciences (GILD), GSK (GSK), Merck (MRK), Novartis (NVS), and Sanofi (SNY).Each firm is committed to implementing “Most Favored Nation” pricing for Medicaid, the federal health insurance program for low-income Americans, ensuring that drugs priced higher in the US than in comparable nations will be discounted to international levels.The companies will also launch new medications at most-favored-nation prices and offer primary care and specialty medications through the TrumpRx platform, a direct-to-consumer website set to launch in January 2026.Several signatory firms have additionally pledged to donate active pharmaceutical ingredients to America’s Strategic Active Pharmaceutical Ingredients Reserve (SAPIR) to support emergency preparedness for pandemics and national security crises.In return for these commitments, the Trump administration granted each company a three-year tariff exemption that shields them from threatened 100% tariffs on brand pharmaceutical imports and 15% tariffs on European Union medicines.According to senior administration officials, approximately 30 to 40% of Medicaid drugs will be impacted by the price reductions.The TrumpRx platform will guide consumers to manufacturers’ direct-to-consumer sales channels where they can purchase medications at negotiated discounts, a model that contrasts with traditional insurance-based purchasing and appeals to uninsured or self-insured Americans seeking cash discounts.Tariff relief tied to discounts The tariff component represents Trump’s primary leverage in these negotiations.Earlier announcements with Pfizer (PFE) and AstraZeneca (AZN) followed similar frameworks: price reductions tied to three-year tariff holidays and commitments to increase domestic manufacturing.The administration signaled willingness to use tariff threats aggressively, with Trump administration officials explicitly acknowledging that tariff pressure drove companies to the negotiating table.Three major pharmaceutical firms remain unsigned as of December 19, creating potential leverage for further negotiations heading into 2026.Democratic lawmakers immediately demanded transparency regarding cost savings and questioned whether the confidential deals truly benefit patients or merely shift financial burdens without delivering meaningful price relief.Health policy experts noted that while Medicaid beneficiaries typically pay little to nothing for medications under existing programs, cash-paying and uninsured patients could see substantial savings through TrumpRx direct purchases, potentially providing greater relief than Medicaid rate changes.Pharmaceutical industry groups acknowledged that the deals represent material concessions but argued that US pricing strategies have historically supported robust research and development investments.Analysts warned that aggressive domestic price controls could discourage new drug development and slow innovation, a concern Trump administration officials dismissed, noting that companies’ willingness to sign indicates sustainable profitability at lower price points.More By This Author:Why Analysts Advise Patience On Nike, Despite Stock Plunging On China Sales Why US Banks Are Still Wary Of Cannabis Despite Trump’s Policy Shift Lululemon Stock Forecast For 2026: Chart Points To A 40% Surge