GLR
United States President Donald Trump announced a series of new agreements on Friday aimed at significantly reducing prescription drug costs for American patients.
Speaking at a White House news conference alongside executives from leading pharmaceutical companies including Bristol Myers Squibb, Gilead Sciences, and Merck, Trump said the deals would align US drug prices with the lowest prices paid in any developed nation.
“Starting next year, American drug prices will come down fast and furious and will soon be some of the lowest in the developed world,” Trump said. “This is the biggest thing having to do with drugs in the history of the purchase of drugs.”
According to senior administration officials, the agreements will require each participating drugmaker to lower prices on certain medications sold through Medicaid, the federal program providing healthcare for low-income Americans, promising “massive savings” on widely used medicines. Officials did not provide precise figures for the expected reductions.
“We were subsidising the entire world. We’re not doing it anymore,” Trump added, flanked by nine pharmaceutical executives.
Mehmet Oz, director of the Centers for Medicare and Medicaid Services, said that Regeneron, Johnson & Johnson, and AbbVie will visit the White House after the holiday period for the official launch of the government’s TrumpRx website, which will help patients access these lower-cost drugs.
US Drug Prices Among the Highest Globally
American patients currently pay the highest prices for prescription medicines in the world, often nearly three times more than individuals in other developed nations. Trump has consistently pressured drugmakers to reduce prices to match what consumers pay abroad.
The details of each agreement are not yet fully disclosed. However, officials said the deals will include cuts to cash-pay, direct-to-consumer prices for select drugs, a commitment to launch new medicines in the US at prices no higher than in other wealthy countries, and efforts to increase domestic manufacturing. In return, companies may receive a three-year exemption from certain tariffs.
Merck announced that it will sell its diabetes medications—Januvia, Janumet, and Janumet XR—directly to US consumers at approximately 70 percent below list prices, as these drugs are expected to face generic competition next year. If approved, its experimental cholesterol drug enlicitide will also be offered through direct-to-consumer channels.
Enlicitide is among two Merck drugs anticipated to receive expedited review under the FDA’s new fast-track pathway, according to Reuters. Amgen said it will expand its direct-to-patient program to include the migraine drug Aimovig and rheumatoid arthritis treatment Amjevita, offering both at $299 per month—a reduction of nearly 60 percent and 80 percent from current US list prices.
Trump’s Push for Most-Favoured-Nation Pricing
In July, Trump sent letters to leaders of 17 major pharmaceutical companies, instructing them to offer “most-favoured-nation” prices to the Medicaid program and to guarantee that new drugs would not launch at prices above those in other high-income countries.
To date, five companies—Pfizer, Eli Lilly, AstraZeneca, Novo Nordisk, and EMD Serono (the US division of Germany’s Merck)—have reached agreements with the administration to rein in drug prices. Officials also noted that a portion of revenues from foreign sales will be remitted to the US to help offset domestic costs.
The participating companies pledged to invest more than $150 billion in domestic research, development, and manufacturing, though officials did not clarify whether this figure includes previous commitments. Several companies also agreed to donate drug ingredients to the US Strategic National Stockpile.
Market and Policy Implications
Trump has long highlighted the discrepancy between US drug prices and those in other wealthy nations, many of which operate government-run healthcare systems that negotiate discounted prices.
While the prospect of tighter government controls initially unnerved investors, analysts noted that the terms of the deals announced so far have alleviated many concerns. They also highlighted that Medicaid, which accounts for roughly 10 percent of total US drug spending, already benefits from substantial price discounts, sometimes exceeding 80 percent.
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