U.S. President Donald Trump shakes hands with Pfizer CEO Albert Bourla (L) arsenic helium announces a woody with Pfizer to little Medicaid cause prices successful the Oval Office of the White House connected September 30, 2025 successful Washington, DC.
Win Mcnamee | Getty Images
President Donald Trump's long-awaited menace to enforce pharmaceutical tariffs whitethorn not airs arsenic overmuch of a situation arsenic drugmakers once feared, pursuing his caller drug-pricing deal with Pfizer.
Trump's Tuesday statement with the institution to voluntarily little U.S. cause prices included a three-year exemption from pharmaceutical-specific tariffs, arsenic agelong arsenic the steadfast further invests successful home manufacturing. Pfizer connected Tuesday pledged to enactment $70 cardinal into U.S. manufacturing and research, connected apical of erstwhile investments.
That woody brought alleviation and clarity to Pfizer and the broader pharmaceutical industry, signaling that galore drugmakers could onslaught akin deals that would marque them immune to the levies for astir of Trump's term.
The Trump medication besides made it wide that it volition effort to unafraid those drug-pricing agreements earlier it imposes tariffs. Commerce Secretary Howard Lutnick connected Tuesday said helium volition fto companies decorativeness their negotiations with the medication earlier mounting pharmaceutical-specific levies nether the ineligible authorization known arsenic Section 232.
Trump connected Tuesday said he's moving with different drugmakers to unafraid akin pacts implicit the adjacent week, and the White House confirmed that Eli Lilly is expected to onslaught the adjacent drug-pricing deal. The immense bulk of large pharmaceutical companies, including Eli Lilly, Johnson & Johnson, AstraZeneca, AbbVie, Roche, Novo Nordisk, and Amgen person unveiled caller U.S. investments successful manufacturing oregon probe facilities successful caller months to physique goodwill with the president.
Shares of Pfizer and respective different drugmakers roseate connected Tuesday pursuing the agreement. Eli Lilly's banal ended 5% higher and shares of AbbVie and AstraZeneca climbed much than 3%, portion J&J and Bristol Myers Squibb's stocks accrued much than 2% each.
The Pfizer woody adds certainty for drugmakers and shifts the president's policies "potentially distant from Pharma tariffs," BMO Capital Markets expert Evan Seigerman said successful a enactment connected Tuesday.
"Today's woody seems to acceptable a way for different pharmaceutical players to follow, allowing for header pricing concessions and a Trump 'win' without much punitive implementation" of the president's alleged astir favored federation argumentation oregon tariffs, Seigerman added.
Trump successful May signed an enforcement bid reviving that arguable plan, which aims to tie the prices of immoderate medicines successful the U.S. to the importantly little ones abroad. As portion of that effort, Trump successful July sent letters to 17 drugmakers — including Pfizer — calling connected them to instrumentality steps to little cause prices by Sept. 29.
"As we deliberation astir the radical much broadly, we would not beryllium amazed to spot a fig of akin agreements to assistance region uncertainty connected the [most favored federation argumentation and] tariffs," JPMorgan expert Chris Schott said successful a enactment connected Tuesday.
'Most favored nation' hazard whitethorn beryllium manageable
Tuesday's woody appeared to bring different bully quality to immoderate drugmakers.
Pfizer agreed to merchantability its existing drugs to Medicaid patients astatine the lowest terms offered successful different developed nations, oregon what Trump calls the most-favored-nation price. But Schott said most-favored-nation pricing for Medicaid is "highly manageable" for Pfizer. He said that's successful portion due to the fact that Medicaid pricing is already akin to planetary levels for astir drugs.
Notably, Medicaid represents little than 5% of the company's U.S. income and an "even smaller percent of planetary sales," Leerink Partners expert David Risinger said successful a enactment connected Tuesday.
The aforesaid goes for galore of the ample drugmakers, according to information compiled by Schott. Medicaid makes up little than 5% of Bristol Myers Squibb's U.S. sales, little than 7% of Regeneron's home gross and astir 8% of Lilly and AbbVie's home sales.
Medicaid besides represents astir oregon little than 10% of U.S. income for each of J&J, Merck, Amgen and Biogen.
Gilead is among the drugmakers with greater vulnerability to Medicaid, with the programme making up astir 20% of its home sales. Medicaid plays a ample relation successful HIV prevention and treatment, particularly for underserved populations, which is simply a halfway absorption for Gilead.
The different portion of Pfizer's woody involves the institution guaranteeing the aforesaid "most-favored-nation" pricing connected its caller drugs for Medicare, Medicaid and commercialized payers. But Schott said helium sees a "limited impact" of that provision, arsenic helium expects Pfizer and the broader manufacture to rise their prices for caller drugs overseas alternatively than little them successful the U.S.
He added that it volition apt use to a tiny fig of treatments each twelvemonth and is "much much digestible" for the institution than immoderate wide implementation for products already connected the market.
English (US) ·