Donald Trump and nine major pharmaceutical companies on Friday announced deals that will slash the prices of their medicines for the government’s Medicaid program and for cash payers, in his latest bid to align US costs with those in other wealthy nations.
Bristol Myers Squibb, Gilead Sciences, and Merck and Roche’s US unit Genentech have struck deals. Novartis, Amgen, Boehringer Ingelheim, Sanofi and GSK have also signed on.
Under the deals, each drugmaker will cut prices on most drugs sold to the Medicaid program for low-income people, senior administration officials said, promising “massive savings” on widely used medicines without giving specific figures.
US patients currently pay by far the most for prescription medicines, often nearly three times more than in other developed nations, and Trump has been pressuring drugmakers to lower their prices to what patients pay elsewhere.
The details of each deal were not immediately available but officials said they included agreements to cut cash-pay direct-to-consumer prices of select drugs sold potentially through the TrumpRx.gov website, to launch drugs in the US at prices equal to – not lower than – those in other wealthy nations and to increase manufacturing. In return, companies can receive a three-year exemption from any tariffs.
Merck said it will sell its diabetes drugs Januvia, Janumet and Janumet XR – set to face generic competition next year – directly to US consumers at about 70% off list prices. If approved, its experimental cholesterol drug enlicitide will also be offered through direct-to-consumer channels.
Enlicitide is one of two Merck drugs expected to receive a speedy review under the FDA’s new, fast-track pathway, Reuters previously reported.
In July, Trump sent letters to leaders of 17 major drugmakers, urging them to offer so-called most-favored-nation prices to Medicaid and ensure new medicines launch at prices no higher than those in other wealthy countries.
Five companies had previously struck deals with the administration to rein in prices – Pfizer, Eli Lilly, AstraZeneca, Novo Nordisk and EMD Serono, the US division of Germany’s Merck KGaA. The remaining three that have not announced deals are Regeneron , Johnson + Johnson, and AbbVie. Investors initially feared sweeping US price controls, but the details of recent deals have largely eased those concerns.
Reuters previously reported that AbbVie was expected to announce a deal on Friday. Drugmakers on Friday committed to “most-favored-nation” pricing on all new US drug launches across commercial, government and cash-pay markets, including the US Medicare program for those aged 65 and over, officials said.
A portion of revenues from each company’s foreign sales will also be remitted to the US to offset costs, officials said. The companies pledged together to invest more than $150bn in US for research and development and manufacturing, according to officials, although it was unclear whether that included earlier commitments. Several also agreed to donate drug ingredients to the US strategic reserve.
Merck said it chipped in $70bn of that sum.
Analysts have noted that Medicaid, which accounts for only about 10% of US drug spending, already benefits from substantial price discounts, exceeding 80% in some cases.
Pfizer, which announced its 2026 financial outlook on Tuesday, said the Medicaid discounts would result in price and margin compression next year.
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