After Pfizer, AstraZeneca Strikes Drug Price Pact with Trump — Who’s Next to Capitulate?

TradingKey - U.S. President Trump announced on Friday that British pharmaceutical giant AstraZeneca has reached a major drug pricing agreement with the government, marking the second significant deal following a similar agreement with Pfizer last week.

AstraZeneca has agreed to sell medications directly to Medicaid patients at the lowest price offered in other developed countries (what Trump refers to as "Most Favored Nation" pricing) through the upcoming government website TrumpRx.gov. In exchange, AstraZeneca will receive three years of tariff relief.

Simultaneously, AstraZeneca reaffirmed its July commitment to invest $50 billion in U.S. manufacturing and research and development. A new $4.5 billion manufacturing facility in Virginia broke ground on Thursday, with CMS Administrator Mehmet Oz and Virginia Republican Governor Glenn Youngkin attending the ceremony.

This agreement is part of the Trump administration's long-standing strategy to lower drug prices. With U.S. drug costs significantly higher than in other developed nations, causing dissatisfaction among voters across the political spectrum, Trump signed an executive order in May this year insisting on the implementation of the "Most Favored Nation" pricing principle.

Subsequently, in July, he wrote to the CEOs of 17 pharmaceutical companies, requesting that this model be applied to Medicaid programs and government direct procurement services, emphasizing that pharmaceutical companies should use overseas revenue to lower drug prices in the United States.

According to the White House fact sheet released when Trump first announced the plan in July, the U.S., representing less than 5% of the world's population, accounts for 75% of global pharmaceutical profits.

Trump stated at Thursday's cabinet meeting that global drug prices would inevitably rise slightly, but U.S. prices would drop significantly. "So if a pill sells for $10 in London and $100 here, the pill will go to $20 in London and $20 for us. It’s pretty simple."

He emphasized that “every country, essentially,” is willing to accept this price increase when faced with the threat of further U.S. tariffs.