Trump's Pharmacy Enlists 17th Pharma Giant, Reshaping Global Pricing Power for Chinese Innovator Drugs

Introduction

On April 23, Regeneron became the 17th pharmaceutical giant to sign a Most Favored Nation (MFN) pricing agreement with the Trump administration. In the same week, Bristol-Myers Squibb (BMS) and Pfizer announced that their key anticoagulant drug had launched on Mark Cuban's Cost Plus online pharmacy. Also in the same week, Johnson & Johnson listed three SGLT2 diabetes drugs (Invokamet, Invokamet XR, Invokana) and Xarelto on the TrumpRx platform at cash prices, with Xarelto starting at $197, a 68% decrease from the original price.

A series of actions have been intensively implemented, and many people regard this as a domestic political show in the U.S., with Trump performing the act of lowering drug prices in front of voters. However, if you are planning a global commercialization path for an innovative drug, this judgment could come at a cost.

 01 

Large pharmacies are not a gimmick, but a carefully designed price restructuring mechanism.

To understand the significance of this matter, we must first clarify what TrumpRx is actually doing.

TrumpRx.gov, officially launched in February 2026, appears to be a government-introduced portal designed to help American patients access discounted prescription drugs. Novo Nordisk's oral semaglutide dropped from $1,349 to $149, AstraZeneca's dapagliflozin fell from $599 to $181, and Pfizer's crisaborole ointment decreased from $792 to $158. The discount levels are staggering, with maximum political impact.

But the real mechanism design lies beyond pricing: bypassing PBMs (Pharmacy Benefit Managers) and the commercial insurance chain, the government directly negotiates with pharmaceutical companies, using the dual axes of Medicaid’s most-favored-nation price and TrumpRx direct sales, in exchange for a three-year tariff exemption and investment incentives for the pharmaceutical companies. The White House officially defines this as the Most-Favored-Nation Pricing Framework: the price paid by American patients must not exceed the lowest price for the same drug in other developed countries.

This design is not complicated, but it has an unprecedented feature in the history of medicine: it was implemented in the form of an administrative order combined with a commercial agreement package, bypassing the legislative process and also circumventing the judicial review channel that pharmaceutical companies are most adept at utilizing. When 17 pharmaceutical companies, which together cover the majority of the global prescription drug market, have signed on, this framework is no longer political theater—it is a functioning market reality.

 02 

Why is Regeneron the 17th, not the first?

Understanding the pace of each company's signings is more important than knowing what was signed.

Pfizer was the first to complete the agreement in September 2025, securing tariff extensions and policy exemptions. AstraZeneca followed closely. Nine pharmaceutical companies signed agreements in December 2025, while Regeneron delayed until April 2026.

The reason for the delay is not difficult to understand: Regeneron is a company known for its high-premium biologics, with its star product Dupixent (dupilumab) generating annual sales of over $16 billion. Its pricing logic heavily relies on the high-price system in the U.S. market. Actively accepting MFN means making significant changes to its core business model.

But in the end, it was signed with quite specific terms: Drug pricing in Medicaid is linked to prices in other developed countries; the price of the cholesterol-lowering drug Praluent is reduced from $537 to $225 through TrumpRx direct sales; the newly approved gene therapy Otarmeni is provided free of charge in the U.S.; and future pricing for all new drugs in the U.S. must refer to an international price basket. In exchange, Regeneron receives a three-year drug tariff exemption and commits to invest $9 billion in R&D and manufacturing in the U.S.

The essence of this deal is: trading price for safety, and discount for time. In the face of the Trump administration's tariff weapon, no large pharmaceutical company chose to confront it head-on. The signing of these 17 pharmaceutical companies represents the market casting its vote, with real money, for this mechanism.

 03 

The Real Conduction Chain: The Structural Dilemma of China's Pricing Being Squeezed

Now entering the part that China's Biotech needs to be most vigilant about.

First, let's look at a set of numbers: BeiGene's zanubrutinib, Junshi Biosciences' toripalimab, the price difference between China and the US is close to 30 times; Hutchmed's fruquintinib, the US price is 24 times that of China. This price difference is not due to corporate greed, but an inevitable result of two parallel pricing logics: China's medical insurance negotiations typically require price cuts of 50%-70%, companies trade low domestic prices for market access, and compensate with high US prices for research and development returns.

Nowadays, this logic is being squeezed from both ends.

One end is the U.S. MFN framework, anchored to the lowest price among developed countries globally. Once reference prices from Europe and Japan enter the pricing basket, the price ceiling in the U.S. will systematically drop. For Chinese pharmaceutical companies that are applying to the FDA and planning independent commercialization, it will no longer be possible to set high prices by benchmarking against multinational similar products, as the pricing benchmarks of competitors have already shifted.

Although China is not currently in the direct reference basket of the U.S. MFN, through the chain effect of "low prices in China → transmission to Japan and Europe → lowering of the U.S. MFN benchmark," Chinese drug prices still have an indirect but real impact on the U.S. pricing system. Moreover, as China's price registration system becomes globally accessible, this transmission chain is becoming increasingly shorter, which is another aspect to consider.

On the other hand, China’s low prices are being globally referenced. Currently, 42 countries have adopted China as one of their drug price benchmarks, with five explicitly requiring reference to Chinese pricing. Although the floor prices resulting from China's medical insurance negotiations have significantly changed due to the issuance of Document No. 9, the full effects of implementation have yet to be seen. Based on the current situation, when a drug is listed in China at a price equivalent to less than $10,000 per year, overseas pricing agencies will confidently ask: Why should it be sold for $50,000 here? This creates a pricing squeeze: domestic prices are forced down → referenced as a benchmark overseas → the scope for high prices abroad narrows → international BD valuation expectations drop → corporate valuation logic is shaken.

 04 

Graded Scanning: Who's in the Biggest Trouble, Who Can Turn Crisis into Opportunity

Not all companies face the same level of pressure; a layered assessment is needed.

The most troublesome are companies that have already negotiated low prices through the national medical insurance and are independently applying to the FDA. These companies are caught in two traps at the same time: a domestic low-price anchor has already been established, and the U.S. MFN framework further lowers the external pricing ceiling. If the commercialization path relies on independent sales in the U.S., the internal calculation model for peak sales needs to be rewritten.

Following closely are companies that primarily adopt the License-out model for overseas expansion. On the surface, they have already sold the U.S. rights to multinational corporations (MNCs) in a package deal, thus not directly bearing the pricing risks of the U.S. market. However, the triggering of milestone payments heavily relies on the MNCs' sales forecasts for the U.S. market.

Once the U.S. peak sales forecasts are lowered within MNCs, the corresponding BD deal milestones and upfront payment ceilings will also contract. In 2025, the total annual transaction value of China's innovative drug BD is expected to exceed a historic high of $1.356 trillion, with over $600 billion in just the first quarter of 2026. In such a rapidly growing market, any systematic reduction in expectations will be a substantial blow.

The reversal may even benefit companies that have established real technological barriers in cutting-edge fields such as ADC, bispecific antibodies, and CAR-T, and have not yet entered the U.S. market on a large scale. These companies not only have yet to form a pricing anchor but can also fully capitalize on the policy红利 of Document No. 9, with a sufficient window period to proactively design a global pricing structure. Meanwhile, when the self-developed profits of multinational pharmaceutical companies are squeezed by the MFN framework, the motivation to introduce cost-effective cutting-edge pipelines from China will increase instead. The R&D costs of Chinese pharmaceutical companies are only one-third of those in the U.S., and their clinical efficiency is five times higher than that in Europe and the U.S. This cost-effectiveness will only become more attractive in the MFN era.

 05 

How Long is the Window Period: A New Algorithm for Overseas Pricing

This is a question without a standard answer, but it must be calculated starting now.

The past logic for overseas pricing was linear: first enter China's medical insurance system, exchange the insurance price for volume expansion, then use clinical data to negotiate business development (BD), and utilize the high U.S. price as the valuation ceiling. This chain once worked effectively, but under the MFN framework, the disconnect between China's medical insurance price and the U.S. commercial price is turning from an advantage into a liability.

The new pricing algorithm needs to intervene at an earlier stage, not waiting until the medical insurance negotiation is completed before planning to enter foreign markets. Instead, before deciding whether to participate in the medical insurance negotiation, it is necessary to calculate how this listed price in China will be referenced by 42 countries and how it will affect the future pricing space in the U.S. under the MFN framework.

Some companies are already exploring coping strategies: independently operating overseas rights through the NewCo model to achieve legal isolation between domestic and international pricing; preserving premium space for high-priced innovative drugs via commercial insurance channels outside the medical insurance catalog; planning price tiers within national baskets before entering any country’s market. These are potential directions, but systematic pricing architecture design remains a scarce capability among China’s Biotech community.

Trump's Big Pharma, ultimately, is America's own political product. But the price ripples it has stirred are spreading outward at a predictable pace. China's innovative drug industry has spent a decade growing its overseas market from zero to hundreds of billions of dollars in scale. Whether it can maintain this valuation system over the next decade depends on whether we have already started recalculating today.

If you want to calculate more precisely and see which innovative drug company is more valuable, feel free to contact Wentai Jun via private message. ■

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       Title: Trump's Big Pharmacy Acquires 17th Pharmaceutical Giant—How Will It Impact China’s Global Pricing Power for Innovative Drugs?