Pfizer Gets Three-Year Reprieve From Planned Tariffs, As It Agrees To Lower Drug Prices For Americans

(MENAFN- Live Mint) The Trump administration on Tuesday announced a deal giving Pfizer a three-year reprieve from planned tariffs, while the pharmaceutical giant committed to voluntarily lowering prices on unspecified drugs for US consumers.

President Donald Trump announced a landmark agreement with Pfizer to reduce prescription drug costs for Medicaid, promising similar deals with other drugmakers in the coming weeks.

“I can't tell you how big this is,” Trump said at the White House during an event with Pfizer CEO Albert Bourla.“We are turning the tide and we are reversing an unfair situation.”

The announcement comes just hours ahead of a potential government shutdown, amid partisan standoffs over healthcare and federal spending.

Pfizer to offer 'Most-Favored-Nation' pricing

Under the deal, Pfizer will provide Medicaid with most-favored-nation pricing, meaning the company will charge the lowest prices it offers in other developed countries. The agreement also ensures that this pricing model will apply to all new drugs launched in the US.

“The United States is done subsidizing the healthcare of the rest of the world,” Trump added, emphasizing his administration's goal to lower costs for Americans.

Bourla praised the agreement, saying,“We are turning the tide and we are reversing an unfair situation.” He highlighted the company's commitment to invest $70 billion in research, development, and domestic manufacturing.

Direct-to-Consumer platform: TrumpRx

As part of the deal, Pfizer will participate in the administration's new website, TrumpRx, which will allow Americans to buy drugs directly from manufacturers. TrumpRx is expected to launch in 2026, and Pfizer plans to offer discounts averaging 50%, with some medications seeing savings as high as 85%.

Highlighted drugs include:

Xeljanz (rheumatoid arthritis) – list price over $6,000/month

Zavzpret (migraine)

Eucrisa (dermatitis)

Duavee (post-menopausal osteoporosis)

Bourla noted that Pfizer received a three-year grace period exempting its products from tariffs, contingent on moving manufacturing to the US.

Background: Trump's pressure on drugmakers

The agreement follows a May executive order directing drugmakers to voluntarily lower prices or face new government-imposed limits on reimbursements. In late July, Trump sent letters to 17 major pharmaceutical companies, asking for binding commitments to slash prices to match international levels by September 29.

Pfizer is the first drugmaker to finalize a deal, with Trump signaling additional agreements in the near future.

Scope and impact

The pricing changes will affect Medicaid, which covers more than 70 million low-income Americans. However, Medicare, which covers older adults and people with disabilities, was not included in this announcement.

Medicare's drug spending reached $216 billion in 2021, while Medicaid's gross spending was around $80 billion. The new prices under the deal are scheduled to take effect in 2026.

Also Read | AI meets pediatric cancer: Trump signs order to accelerate research and cure

MENAFN30092025007365015876ID1110133027