Amid President Trump's push to link U.S. drug prices with lower-cost international markets, several major U.S. and European pharmaceutical companies have recently reached an agreement with the White House. They have voluntarily committed to reducing drug prices in the U.S. in exchange for tariff exemptions and policy support. The Trump administration is reviving the "Most Favored Nation" pricing policy, aiming to lower the high costs of prescription drugs through executive action.
According to disclosures from the White House, companies that have signed the agreement include Merck (MRK.US), Bristol-Myers Squibb (BMY.US), Amgen (AMGN.US), Gilead Sciences (GILD.US), GlaxoSmithKline (GSK.US), Sanofi (SNY.US), Rogers (ROG.US), Boehringer Ingelheim, and Novartis (NVS.US). These firms have agreed to be exempt from planned industry-specific tariffs for the next three years, provided they increase domestic production and investment in the U.S.
A key highlight of the agreement is Bristol-Myers Squibb's (BMY.US) pledge to provide its blockbuster anticoagulant Eliquis free of charge to Medicaid patients. Eliquis is one of the most prescribed drugs in the U.S., making this one of the most significant price reduction measures in the current initiative.
President Trump announced at a public event on Friday that 14 out of the 17 major pharmaceutical companies he had urged to lower prices in July have now agreed to significant reductions. "This represents the biggest victory for patient affordability in the history of the U.S. healthcare system, benefiting every American," he said. However, Johnson & Johnson (JNJ.US), AbbVie (ABBV.US), and Regeneron Pharmaceuticals (REGN.US) have yet to sign the agreement, though Johnson & Johnson is expected to join "next week."
While full terms of the deal remain undisclosed, the White House confirmed that participating companies have agreed to multiple measures to lower U.S. drug prices, including offering "Most Favored Nation" pricing for Medicaid patients and making commitments on future drug pricing. Additionally, Trump stated that these firms will list their most popular drugs on the government’s planned direct-purchasing platform, TrumpRx, set to launch in January next year.
Several companies also announced new or expanded direct-to-patient sales programs. Gilead Sciences (GILD.US) will offer its hepatitis C treatment Epclusa at a discounted price, while Sanofi (SNY.US) revealed discounts of up to 70% for some drugs in infectious diseases, cardiovascular, and diabetes treatments. Merck (MRK.US) will provide cash-paying patients with diabetes drugs Januvia, Janumet, and Janumet XR at approximately 30% off through its direct sales program, extending the initiative once its investigational daily cholesterol-lowering drug is approved.
Merck CEO Davis expressed support for Trump’s policy direction, stating the company backs efforts to "lower U.S. drug prices while raising prices abroad to end global free-riding." Meanwhile, Amgen (AMGN.US) expanded its existing direct sales program to include preventive migraine drug Aimovig and autoimmune treatment Amjevita, offering monthly discounts of 60% and 80%, respectively.
Earlier this year, the Trump administration reached similar agreements with Eli Lilly (LLY.US), Novo Nordisk (NVO.US), Pfizer (PFE.US), AstraZeneca (AZN.US), and EMD Serono, allowing them to sell certain drugs directly to patients at discounted prices in exchange for tariff exemptions and expedited drug approvals.
Data shows that U.S. prescription drug prices are, on average, nearly three times higher than in international markets, with brand-name drugs costing over four times more. While industry group PhRMA argues that "Most Favored Nation" pricing is not the best way to reduce costs—blaming pharmacy benefit managers for price disparities—the U.S. remains one of the most critical revenue sources for global pharmaceutical firms, particularly European companies heavily reliant on the market.
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