Pfizer, Trump Strike Drug Pricing Deal

President Donald Trump has struck a multi-pronged deal with pharmaceutical giant Pfizer to lower the price of some of the company's medicines, while clearing a path for the drugmaker to receive a three-year reprieve from certain tariffs.

The drugmaker will participate in a new direct purchasing platform named TrumpRx.gov that will let American patients buy a “large majority” of its primary care treatments and “some select specialty brands” at a discount. Those drugs will be offered at “savings that will range as high as 85% and on average 50%,” Pfizer said in a press release Tuesday.

The deal comes after Trump demanded that 17 of the largest drugmakers voluntarily offer their medicines at levels similar to what they charge other nations. Pfizer said that it has agreed to voluntarily “implement measures designed to ensure Americans receive comparable drug prices to those available in other developed countries and pricing newly launched medicines at parity with other key developed markets.”

“Pfizer is committing to offer all of their prescription medications to Medicaid, and it will be at the most-favored nations prices,” said Trump, who added during an Oval Office press conference that other drugmakers will also make commitments in the coming weeks. “It’s going to have a huge impact on bringing Medicaid costs down.”

Chris Klomp, Medicare director at the Centers for Medicare and Medicaid Services, said the most-favored nation price will be based on a basket of other wealthy countries.

“Pfizer will be putting virtually all of its portfolio of drugs at MFN prices available to Medicaid in the near future,” Klomp said.

The deal marks a success for Trump, who has been pressuring industries to comply with his requests voluntarily. It is unclear how the deal will impact prices in the commercial insurance market.

“While Democrats are threatening to shut down the federal government to subsidize health care for illegal aliens, President Trump is leveraging the power of the federal government to drastically cut drug prices for everyday Americans,” White House spokesperson Kush Desai said. “Democrats talked the talk for decades about drug prices, but only President Trump is actually walking the walk.”

Pfizer said it would spend an additional $70 billion over the “next few years” on research and development, as well as capital projects, which would likely make it eligible for a three-year reprieve from tariffs stemming from the Trump administration’s section 232 investigation. That investigation on pharmaceuticals could result in tariffs being applied based on the effects of imports on national security.

Trump announced last week that the government would place a 100 percent tariff on “any branded or patented” drug made by companies that are not building manufacturing facilities in the U.S. starting on Oct. 1.

"We now have the certainty and stability we need on two critical fronts, tariffs and pricing, that have suppressed the industry's valuations to historic lows,” Pfizer CEO Albert Bourla said in a statement.

Brand drug lobby Pharmaceutical Research and Manufacturers of America announced Monday that its members would be investing $500 billion in new U.S.-based infrastructure investments.