Trump Administration Secures Drug Price Deals with Nine Major Pharmaceutical Companies

Historic Agreements Aim to Lower Prescription Costs

In a significant move to address the high cost of prescription drugs in the United States, President Donald Trump announced new agreements with nine major pharmaceutical companies on Friday, December 19, 2025. The deals, unveiled at the White House, are designed to reduce drug prices for American consumers, particularly those covered by Medicaid and cash-paying patients, by aligning U.S. costs with those found in other developed nations.

The participating companies include Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech (Roche's U.S. unit), Gilead Sciences, GSK, Merck, Novartis, and Sanofi. These agreements build upon previous deals with five other drugmakers, bringing the total number of companies committed to these pricing strategies to 14 out of 17 targeted by the administration.

Key Pillars of the 'Most-Favored-Nation' Initiative

The core of these new agreements centers on the 'Most-Favored-Nation' (MFN) pricing strategy, a long-standing objective of the Trump administration. The agreements stipulate several key provisions:

• Medicaid Pricing: The pharmaceutical companies have committed to selling the majority of their products to state Medicaid programs at prices equivalent to those offered in other wealthy countries. While Medicaid already benefits from significant discounts, officials anticipate 'massive savings' for the program.
• Direct-to-Consumer Sales: A new government website, TrumpRx.gov, is set to launch in January. Through this platform, companies will offer medicines at a 'deep discount off the list price' directly to American patients who pay with cash, bypassing traditional insurance.
• New Drug Launches: The agreements ensure that new innovative medicines introduced by these companies in the U.S. will also adhere to MFN pricing, preventing foreign nations from 'free riding' on American innovation.

Incentives and Economic Commitments

In exchange for their participation in these pricing agreements, the pharmaceutical companies will receive a three-year exemption from any tariffs on pharmaceutical imports, a significant incentive offered by the administration. Some companies also stand to benefit from expedited Food and Drug Administration (FDA) reviews for future approvals.

Beyond pricing, the companies have collectively pledged to invest more than $150 billion in U.S. research and development (R&D) and manufacturing. Notably, Merck alone committed $70 billion of this sum. Additionally, several drugmakers have agreed to donate active pharmaceutical ingredients to the Strategic Active Pharmaceutical Ingredients Reserve, an initiative aimed at bolstering national security by reducing U.S. reliance on foreign drug manufacturing.

Addressing High U.S. Drug Costs

President Trump emphasized that the deals are a direct response to the long-standing issue of American patients paying significantly more for prescription medicines—often nearly three times more—than their counterparts in other developed nations. 'We were subsidizing the entire world. We're not doing it anymore,' Trump stated at a White House press conference, flanked by executives from the participating drug companies.