Trump The threat of the pharmaceutical rate decreases after the Pfizer agreement


The president of the United States, Donald Trump, shakes hand with the Pfizer CEO, Albert Bourla (L), while announcing an agreement with Pfizer to reduce Medicaid drug prices in the Oval Office of the White House on September 30, 2025 in Washington, DC.

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The long -awaited threat of President Donald Trump to impose pharmaceutical tariff Pfizer.

Trump's Tuesday agreement with the company to voluntarily reduce the prices of US medications included a three -year exemption from specific pharmaceutical rates, provided that the company invests even more in national manufacturing. Pfizer undertook on Tuesday to put $ 70 billion in the manufacture and investigation of the United States, in addition to the previous investments.

This agreement brought relief and clarity to Pfizer and the broader pharmaceutical industry, indicating that many drug manufacturers could attack similar agreements that would make them immune to taxes during most of Trump's term.

The Trump administration also made it clear that it will try to ensure those drug price agreements before imposing rates. The Secretary of Commerce, Howard Lutnick, said Tuesday that it will allow companies to finish their negotiations with the administration before establishing specific pharmaceutical levies under the legal authority known as section 232.

Trump said Tuesday that he is working with other drug manufacturers to ensure similar pacts during the next week, and the White House confirmed that Eli Lilly It is expected to reach the next drug prices agreement. The vast majority of the main pharmaceutical companies, including Eli Lilly, Johnson and Johnson, Astrazeneca, Abbot, Roche, Novo Nordisk and Amgen They have presented new US investments in manufacturing or research facilities in recent months to build good will with the president.

Pfizer actions and several other medication manufacturers increased on Tuesday after the agreement. Pfizer's shares ended more than 6% higher, while Eli Lilly rose 5%. The actions of Abbvie and Astrazeneca rose more than 3%, while the actions of J & J and Bristol Myers Squibb increased more than 2% each.

The Pfizer agreement adds certainty for medication manufacturers and changes the president's policies “potentially far from pharmaceutical rates,” BMO Analyst Markets Evan Seigman Capital said Tuesday.

“Today's agreement seems to establish a path for other pharmaceutical players to continue, allowing main price concessions and a Trump 'win' without a more punitive implementation” of the so -called most favored policy or tariffs of the president, Seigerman added.

Trump in May signed an executive order that revived that controversial plan, which aims to link the prices of some medications in the United States to the lowest abroad. As part of that effort, Trump in July sent letters to 17 drug manufacturers, including Pfizer, asked to take measures to reduce medicines prices before September 29.

“While we think of the group more broadly, we would not surprise us to see a series of similar agreements to help eliminate uncertainty about the [most-favored-nation policy and] Tariffs, “said JPMorgan Analyst Chris Schott on a note on Tuesday.

The risk of 'most favored nation' can be manageable

Tuesday's agreement seemed to bring other good news to some drug manufacturers.

Pfizer agreed to sell their existing medications to patients from Medicaid at the lowest price offered in other developed nations, or what Trump calls the most favored nation price. But Schott said that the most favored price of the nation for Medicaid is “highly manageable” for Pfizer. He said it is partly due to the fact that the price of Medicaid is already similar to international levels for most drugs.

In particular, Medicaid represents less than 5% of the company's US sales and an “even smaller percentage of global sales,” said Readink Partners David Risinger analyst in a note on Tuesday.

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The same goes for many of the great medication manufacturers, according to data compiled by Schott. Medicaid represents less than 5% of Bristol Myers Squibb US sales, less than 7% of Regeneron's national revenues and about 8% of Lilly and Abbvie's national sales.

Medicaid also represents around 10% of US sales for all people in J & J, Merck, Amgen and Biogen.

Head It is among the manufacturers of drugs with greater exposure to Medicaid, and the program represents about 20% of its national sales. Medicaid plays an important role in the prevention and treatment of HIV, especially for unattended populations, which is a central approach to Gilead.

The other part of the Pfizer agreement implies that the company guarantees the same most favored nation prices in its new medications for Medicare, Medicaid and commercial payers. But Schott said he sees a “limited impact” of that disposition, since he expects Pfizer and the industry in general to increase their prices of new medications abroad instead of reducing them in the United States.

He added that it will probably apply to a small number of treatments every year and that it is “much more digestible” for the company than any broad implementation for products that are already in the market.

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