President Donald Trump announced Tuesday a groundbreaking agreement with Pfizer to slash prescription drug prices for American patients.
The deal marks the first implementation of Trump’s “most-favored-nation” pricing policy, matching U.S. drug costs to the lowest prices paid by other developed nations.
The landmark agreement could save millions of dollars for state Medicaid programs while addressing a longstanding inequity that has forced Americans to subsidize cheaper drug prices abroad.
More than 100 million patients who rely on Pfizer medications stand to benefit from the reduced costs.
Under the agreement, every state Medicaid program will gain access to most-favored-nation pricing on Pfizer products. The pharmaceutical giant also committed to offering steep discounts when selling directly to patients.
Some medications will see dramatic price cuts. Eucrisa, a treatment for atopic dermatitis, will be available at an 80% discount for direct purchases.
Xeljanz, used for arthritis and ulcerative colitis, will cost 40% less. Zavzpret, a migraine medication, will be sold at half price.
The deal addresses a stark pricing disparity that has persisted for years. Americans currently pay more than three times what other developed nations pay for brand-name drugs, even after accounting for U.S. discounts.
Despite representing less than 5% of the global population, the United States generates approximately 75% of the world’s pharmaceutical profits. This imbalance has effectively forced American consumers to subsidize both drug company profits and foreign healthcare systems.
Trump laid the groundwork for this announcement through executive action in May. He directed his administration to pursue most-favored-nation pricing for American patients.
In July, the President sent letters to major pharmaceutical companies outlining required steps to reduce U.S. drug prices. The message was clear: match the lowest prices offered to other developed nations.
“In case after case, our citizens pay massively higher prices than other nations pay for the same exact pill, from the same factory, effectively subsidizing socialism abroad with skyrocketing prices at home,” Trump said. “So we would spend tremendous amounts of money in order to provide inexpensive drugs to another country.”
The agreement also requires Pfizer to repatriate increased foreign revenue from Trump’s trade policies. Additionally, the company must guarantee most-favored-nation prices on all future innovative medicines it develops.
The Pfizer deal represents a significant victory for Trump’s America First healthcare agenda. It demonstrates that major pharmaceutical companies can be compelled to end practices that have long disadvantaged American patients.