US President Donald Trump on Friday announced a deal with AstraZeneca PLC that he said would lead to significantly lower domestic drug prices in exchange for granting the pharmaceutical giant tariff relief.
The agreement, which follows a similar accord announced last month with US giant Pfizer Inc, requires AstraZeneca to charge “most-favored nation” pricing — matching the lowest price offered in other wealthy nations — to Medicaid, the US health insurance program for low-income Americans.
Officials also said the British drugmaker had agreed to participate in a Web site called TrumpRx that would allow direct purchasing at reduced prices.
Photo: Bloomberg
Centers for Medicare and Medicaid Services Administrator Mehmet Oz 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, which had previously announced plans to invest US$50 billion in the US 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 officer Pascal Soriot, who appeared with Trump, Oz and other officials at a White House event early Friday night.
The agreement comes on the heels of a Sept. 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 US, and have sparked numerous legislative and administrative actions the impact of which can be difficult to determine.
Shares of Pfizer and other drugmakers surged after the Sept. 30 announcement, suggesting they are not viewed as a major drag on profits.
“From a company perspective, you have more visibility going forward,” CFRA Research analyst Sel Hardy said. “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 would be determined by pricing negotiations next month on 15 leading drugs under legislation signed by former US president Joe Biden in 2022.
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