Pfizer has struck a deal with the Trump administration to provide all of its prescription drugs to Medicaid patients at “most favored nation” prices, and to pledge $70 billion in new U.S. production and R&D investments. The company also plans to offer direct-to-consumer discounts averaging 50%, with savings reaching up to 85%, through a new federal platform, TrumpRx.gov. In exchange, Pfizer secured a three-year grace period from steep Section 232 tariffs on pharmaceutical imports.
Fierce Pharma reported:
Moving forward, Pfizer has committed to pricing any new medications in the U.S. at an MFN cost point aligned with prices in other key developed markets, and the company will also spend an additional $70 billion on onshore production and R&D “in the next few years.” The company noted that it invested more than $83 billion in American biotech from 2018 through 2024.
The commitments have won Pfizer a three-year grace period, during which the company will be immune to the administration’s Section 232 tariffs on pharmaceutical imports, which have landed at 100% for non-EU and Japanese companies that aren’t actively building new production facilities in the U.S.
“Albert Bourla looks very calm up here and cat-like, but he is ferocious when you get him in a negotiating room,” Oz said about Pfizer’s CEO, who stood with the administration during the conference. “This is true for all of the pharmaceutical companies that we are negotiating with.”
Regarding what the administration’s MFN framework actually looks like, Oz’s right-hand man Klomp noted that “this is not made-up list prices that have often been quoted in prior administrations, stuffed with fees and rebates.”
“We start at net prices, after fees, after rebates—the prices people actually pay here,” he explained. “We then index to a basket of countries, wealthy countries across the world, and we go drug by drug, and we look for the lowest price, and that becomes the starting point for what an MFN price is in the United States.”
In a fact sheet issued midday Tuesday, the White House elaborated on a few of the discounts it secured with Pfizer, including an 80% price reduction for people purchasing the atopic dermatitis ointment Eucrisa directly, a 40% DTC discount for the immunology drug Xeljanz, and a 50% discount for Zavzpret, a migraine nasal spray approved by the FDA in 2023.
Further terms of the deal were not disclosed, but the discount examples in the White House fact sheet reflect smaller drugs in the grand scheme of Pfizer’s sales.
“[T]his is not the only agreement; it’s the first,” Klomp said toward the end of the press event. OZ, for his part, teased “breaking news” on drug pricing agreements “for the rest of the fall.”
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