Major Pharma Companies Including Merck & Bristol Myers Squibb Agree to Lower U.S. Drug Prices in Exchange for Trump Administration Tariff Exemptions and Policy Support

As U.S. President Trump pushes to link U.S. drug prices with lower-priced overseas markets, several large American and European pharmaceutical companies have recently reached agreements with the White House to voluntarily lower the prices of drugs sold in the U.S. in exchange for tariff exemptions and policy support. The Trump administration is restarting the "most-favored-nation drug pricing" policy, attempting to reduce the high costs of prescription drugs in the U.S. through administrative measures.

Intelligent Finance APP learned that, according to the White House disclosure, companies that have signed agreements include Merck (MRK.US), Bristol-Myers Squibb (BMY.US), Amgen (AMGN.US), Gilead Sciences (GILD.US), GlaxoSmithKline (GSK.US), Sanofi-Aventis (SNY.US), Rogers (ROG.US), Boehringer Ingelheim, and Novartis (NVS.US), etc. These companies agreed that their products will not be affected by the special tariffs that the Trump administration plans to impose on the pharmaceuticals industry in the next three years, provided they continue to increase production and investment in the United States.

In this agreement, the most market-focused aspect is Bristol-Myers Squibb's (BMY.US) commitment to reducing prices. The company stated that it would provide its best-selling anticoagulant drug, Eliquis, free of charge to Medicaid patients in the United States. Eliquis is one of the most prescribed drugs in the U.S., and this move is considered one of the most significant measures in this round of price reductions.

Trump stated at a public event on Friday that 14 of the 17 large pharmaceutical companies he wrote to in July demanding price cuts have agreed to significantly reduce drug prices. "This represents the biggest victory in terms of patient affordability in the history of the American healthcare system, and every American will benefit from it." He also noted that Johnson & Johnson (JNJ.US), AbbVie Inc. (ABBV.US), and Regeneron Pharmaceuticals (REGN.US) have not yet signed the agreement, but Johnson & Johnson is expected to "join next week."

Although the full terms of the agreement have not been disclosed yet, the White House revealed that these pharmaceutical companies have agreed to take several measures to lower drug prices in the United States. These include selling existing drugs to Medicaid patients at the "most favored nation price" and making commitments regarding the pricing of future new drugs. Additionally, Trump stated that the relevant companies will also list their most popular drugs on the direct sales platform, TrumpRx, which the government plans to launch in January next year.

Multiple Companies Announce Launch or Expansion of Direct-to-Patient Sales Programs. Gilead Sciences stated it will allow patients to access its hepatitis C treatment drug Epclusa at a discounted price; Sanofi mentioned that discounts on some of its drugs in the infectious disease, cardiovascular, and diabetes fields are close to 70%; Merck announced that it will offer three diabetes drugs—Januvia, Janumet, and Janumet XR—through a direct sales program to cash-paying patients at approximately a 30% discount, with plans to extend this initiative once its investigational daily cholesterol-lowering medication receives approval.

Merck CEO Davis said at the press conference that the company supports Trump's policy direction of "lowering drug prices in the U.S. while increasing prices overseas and ending global free-riding." Meanwhile, Amgen announced the expansion of its existing direct sales program to include preventive migraine drug Aimovig and autoimmune treatment Amjevita, with monthly price discounts reaching 60% and 80%, respectively.

Earlier this year, the Trump administration reached similar agreements with Eli Lilly, Novo Nordisk, Pfizer, AstraZeneca, and EMD Serono, allowing them to sell certain drugs directly to patients at discounted prices in exchange for policy support such as tariff exemptions and expedited approvals for new drugs. Data shows that the average price of prescription drugs in the U.S. is nearly three times that of overseas markets, with brand-name drugs costing more than four times as much. Although the industry association PhRMA believes that "most-favored-nation pricing" is not the best way to lower drug prices and attributes the price difference to pharmacy benefit management organizations, the U.S. market remains one of the most important revenue sources for global pharmaceutical companies, especially for European firms, whose reliance on the U.S. market remains high.