NEW YORK: United States President Donald Trump announced a deal with pharmaceutical company AstraZeneca on Friday that he said would lead to significantly lower domestic drug prices in exchange for granting the pharma giant tariff relief.
The agreement requires AstraZeneca to charge “Most Favored Nation” pricing to Medicaid, the US health insurance program for low-income Americans.
This pricing policy means the company must match the lowest price offered in other wealthy nations for its medications.
Officials also said the British drugmaker had agreed to participate in a website called TrumpRx that would allow direct purchasing at reduced prices.
Mehmet Oz, the Trump-appointed leader of the Centers for Medicare and Medicaid Services, said the drugmaker would also provide “massively” discounted drugs for lung disease.
In exchange, Trump administration officials agreed to a three-year delay on new tariffs on AstraZeneca.
The company had previously announced plans to invest 50 billion dollars in the United States in response to looming tariff threats.
“Most of our products are locally manufactured, but we need to transfer the remaining part to this country,“ said AstraZeneca Chief Executive Pascal Soriot.
Soriot appeared with Trump, Oz and other officials at a White House event early Friday night.
The agreement comes on the heels of a September 30 drug price accord with Pfizer that also included three-year tariff relief.
Sky-high drug prices are a perennial source of widespread ire in the United States.
These high costs have sparked numerous legislative and administrative actions the impact of which can be difficult to determine.
The White House announcement on Pfizer did not detail all of the drugs expected to see price cuts.
An administration fact sheet listed three medications, but none are among Pfizer’s top-selling products in the United States.
Shares of Pfizer and other drugmakers surged after the September 30 announcement.
This market reaction suggests the deals are not viewed as a major drag on profits.
“From a company perspective, you have more visibility going forward,“ said CFRA Research analyst Sel Hardy.
“They know they’ll not be facing tariffs for three years.”
Hardy said it was too early to discern the breadth of the Trump administration’s impact on drug prices in a broad sense.
Part of that will be determined by pricing negotiations in November on 15 leading drugs under legislation signed by former president Joe Biden in 2022. – AFP