President Donald Trump unveiled “most favored nation” drug agreements with nine manufacturers on Friday, with senior administration officials claiming that pharmaceutical companies are now rushing to ink deals of their own with the president.
In total, Trump has signed deals with 14 of the world’s 17 largest drug manufacturers. Friday’s newly announced agreements were with Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech, Gilead, GSK, Merck, Novartis, and Sanofi, on top of previous announcements of deals with AstraZeneca, Eli Lilly, EMD Serono, Novo Nordisk, and Pfizer.
Trump’s predecessor, former President Joe Biden, similarly sought to negotiate with drug manufacturers on domestic prices but saw little success. Trump credited his tariff slate with bringing the pharmaceutical executives to the table.
“We told them, ‘If you don’t do it, we’re going to have to use tariffs, and we’re going to charge you a 10% tariff,’ which is far more money than the money we’re talking about,” the president said at the White House. “And they immediately agreed to do it. They said, ‘Is it a threat?’ I said, ‘Yes, it is a threat,’ and they said, ‘We will do it,’ and they dropped the price.
“Starting next year, American drug prices will come down fast and furious and will soon be among the lowest in the developed world,” he continued.
Robert F. Kennedy, Jr., Trump’s Secretary of Health and Human Services, lauded the president during Friday’s event for succeeding where top Democratic lawmakers have failed for years.
“This is the best achievement that could happen to our country. This is something Bernie Sanders has been clamoring for for 25 years, Elizabeth Warren has been clamoring for, Joe Biden promised the American people, President Obama, President Clinton, all promised to do this for the American people,” Kennedy claimed. “You talk about affordability. People are talking about affordability. Nobody has done anything for affordability greater than this.”
Senior administration officials confirmed Friday morning that the new deals are structured the same as the president’s previous deals.
“The majority of each Medicaid portfolio will be priced at MFN effective nearly immediately, protecting our most vulnerable citizens on Medicaid,” one official explained, adding that the deals also feature the same “shared savings mechanism” as before. “When foreign countries pay more for existing drugs, a portion of that revenue will be remitted back to the United States to offset costs so that Americans pay less.”
Trump administration officials claim that roughly 30%-40% of drugs within the Medicaid umbrella are priced higher than in overseas markets and that program beneficiaries will see near immediate price relief.
People on Medicare or consumer insurance plans will similarly be able to purchase new-to-market drugs at MFN prices in the future, but they likely will not see an immediate decrease in their prescription costs. Administration officials noted that those people can also purchase drugs out of pocket, at MFN prices, on TrumpRx.com, the president’s new website aimed at providing people with affordable, direct-to-consumer options to shop for pharmaceuticals.
“This is no longer a trickle,” one senior administration official said ahead of the president’s announcement. “This is a flood. In a sense, it’s gone from a bold policy to an industry standard, and it’s happened in record time. Our phones are ringing off the hook. Our inboxes are overflowing with additional pharmaceutical companies that are seeking to sign MFN agreements with the United States government. What we’ve observed is initial industry hesitance collapsing into cooperation.”
Trump was joined at his announcement ceremony by executives from the nine pharmaceutical companies, whom the president thanked for delivering “the greatest victory for patient affordability in the history of American healthcare.”
“Every single American will benefit,” Trump said. “This is the biggest thing ever to happen on drug pricing and on healthcare, and this will have a tremendous impact on healthcare itself. People used to talk about this for years, but nobody ever did anything about it. No other president did, and it wasn’t easy, but it worked out great.”
Trump’s comments can be seen in full below.
