On Friday, US President Donald Trump signed agreements with nine major US pharmaceutical companies to reduce US drug prices and receive three-year exemptions against threatened tariffs.
These agreements now bring the number of companies aligned to Trump’s price initiative up to 14, from the original 17 that the Trump administration had targeted in this fiscal year.
This latest round is the biggest pharmaceutical price agreement to be announced. It covers treatments for diabetes and rheumatoid arthritis, COPD and HIV/AIDS, hepatitis B, C and hepatitis C.
Trump’s plan to lower drug prices is supported by nine companies
Amgen, Boehringer Ingelheim (Roche), Bristol Myers Squibb (Amgen), Gilead Sciences (Roche), GSK, Merck Novartis Sanofi and Novartis are the nine companies that announced deals Friday.
The firms are committed to “Most Favored Nation Pricing” for Medicaid, which is the federal insurance program that covers low-income Americans. This will ensure that the US prices of drugs, which were higher than those in other comparable countries, would be reduced to the international level.
Companies will launch new medicines at the most favorable-nation price and provide primary care and speciality medications via TrumpRx, an online platform for direct-to consumer sales that is set to be launched in January 2026.
Signatory companies have also pledged active pharmaceutical ingredients for the Strategic Active Pharmaceutical Ingredients Reserve of America (SAPIR), to help support preparedness in case of pandemics or national security emergencies.
The Trump Administration granted each company, in return for their commitments to the Trump campaign, a tariff exemption of three years that protects them against threatened tariffs of 100% on imported brand-name pharmaceuticals and 15% on European Union medicine.
Senior administration officials estimate that between 30 and 40% of Medicaid medications will see price cuts.
TrumpRx will direct consumers to the manufacturers’ direct to consumer sales channels, where they can buy medications at discounted prices. This model contrasts traditional insurance-based buying and is appealing to Americans who are uninsured.
Discounts and tariff relief are linked
Trump has a primary lever in the negotiations to negotiate tariffs.
Pfizer’s and AstraZeneca’s earlier announcements followed similar structures: Price reductions linked to tariff-free periods of three years and commitments for increased domestic production.
Trump Administration officials acknowledged that the tariff threat drove businesses to negotiate.
As of December 19, three major pharmaceutical companies remain unsigned, creating leverage to continue negotiations into 2026.
Democratic lawmakers demanded immediate transparency about cost savings, and asked whether confidential deals actually benefitted patients, or simply shifted financial burdens to the patient without providing meaningful price relief.
Experts in health policy noted that, while Medicaid recipients typically pay very little for medication under current programs, patients who are cash-paying or uninsured could save substantial amounts through TrumpRx Direct Purchase, which may provide greater relief than Medicaid rates changes.
The pharmaceutical industry acknowledged the concessions, but said that US pricing policies have supported research and development investment in recent years.
Analysts have warned that aggressive price controls in the United States could slow down innovation and discourage drug development. Trump Administration officials dismiss this concern, pointing out that companies are willing to sign contracts at low prices because they can be profitable.
As new information becomes available, this post Trump seals deals with 9 pharma companies to lower US drug costs and avoid tariffs could be updated.
