Introduction to Pfizer’s Agreement
Pfizer has agreed to lower the cost of prescription drugs for Medicaid under a deal struck with the Trump administration, President Donald Trump said Tuesday as he promised similar deals with other drugmakers under the threat of tariffs. Trump made the announcement at the White House alongside Pfizer CEO Albert Bourla just hours ahead of a possible government shutdown in a partisan standoff over health care and spending.
Details of the Agreement
Pfizer Inc., one of the largest U.S. drugmakers, produces the COVID-19 vaccine Comirnaty and the treatment Paxlovid. Its products also include several cancer drugs, the blood thinner Eliquis and Prevnar pneumonia vaccines. Under the deal, New York-based Pfizer will charge most-favored-nation pricing to Medicaid and guarantee that pricing on newly launched drugs, Trump said. That involves matching the lowest price offered in other developed nations.
TrumpRx Website
Pfizer also agreed to participate in a new website the administration plans to start called TrumpRx, which will allow people to buy drugs directly from manufacturers. Pfizer said many of its treatments will be offered at discounts that average 50% through that platform. The agreement builds on an executive order Trump signed in May, setting a deadline for drugmakers to electively lower prices or face new limits on what the government will pay. Trump said deals with other drug companies would be coming over the next week.
Reaction to the Agreement
“I can’t tell you how big this is,” the president said Tuesday. “We are turning the tide and we are reversing an unfair situation,” Bourla said. Prescription drug pricing expert Stacie Dusetzina said it isn’t clear yet the extent of the pricing changes that will occur. The Vanderbilt University Medical Center professor noted that Pfizer is keeping specific terms of the deal confidential, and it wasn’t clear how different any new pricing levels will be from what Medicaid already pays Pfizer.
Impact on Consumers
Consumers are not expected to start seeing lower prices under the Pfizer deal until 2026, according to senior administration officials who were not authorized to speak publicly and spoke on condition of anonymity. Patients in Medicaid, the state and federally funded program for people with low incomes, already pay a nominal co-payment of a few dollars to fill their prescriptions, but lower prices could help state budgets that fund the programs. Lower drug prices also will help patients who have no insurance coverage and little leverage to negotiate better deals on what they pay.
Direct-to-Consumer Sales
Drugmakers in the past couple of years have started launching websites to connect customers directly with some products, such as obesity treatments or the blood thinner Eliquis. But Dusetzina said selling drugs like that directly to consumers will help only a small number of people. “Theoretically there are some who will benefit, but in general this is not a solution for lowering drug prices,” she said.
Investment in Domestic Manufacturing
Besides committing to lowering costs, Trump said, Pfizer agreed to spend $70 billion in domestic manufacturing facilities, becoming the latest in a string of major drugmakers to announce plans to build production in the United States. The White House did not immediately release details about the investment, but Pfizer said in a statement that the outlay would be dedicated to U.S. research, development and capital projects in the next few years.
Threat of Tariffs
Trump has been talking for months about the need to lower drug prices and to boost U.S. drug manufacturing. To persuade companies to strike deals, Trump said he threatened to impose tariffs — a favorite tool of his to use as leverage across all areas of government — but that move could raise drug prices. Trump said the tariff threat put the government in “a pretty good negotiating position,” and said, “This is something that most people said was not doable.”
Conclusion
The agreement between Pfizer and the Trump administration marks a significant step towards lowering prescription drug costs for Medicaid patients. While the details of the deal are still unclear, it is expected to have a positive impact on consumers and state budgets. However, some experts have raised concerns about the effectiveness of the direct-to-consumer sales model and the potential for tariffs to raise drug prices.
FAQs
Q: What is the main goal of the agreement between Pfizer and the Trump administration?
A: The main goal of the agreement is to lower the cost of prescription drugs for Medicaid patients.
Q: How will Pfizer achieve this goal?
A: Pfizer will charge most-favored-nation pricing to Medicaid and guarantee that pricing on newly launched drugs.
Q: What is the TrumpRx website?
A: The TrumpRx website is a platform that will allow people to buy drugs directly from manufacturers at discounted prices.
Q: When can consumers expect to see lower prices under the Pfizer deal?
A: Consumers can expect to see lower prices under the Pfizer deal starting in 2026.
Q: How much will Pfizer invest in domestic manufacturing facilities?
A: Pfizer will invest $70 billion in domestic manufacturing facilities over the next few years.
President Donald Trump speaks in the Oval Office of the White House, Tuesday, Sept. 30, 2025, in Washington. Behind the President are Secretary of Health and Human Services Robert F. Kennedy, Jr., left, and Mehmet Oz, Administrator for the Centers for Medicare & Medicaid Services. (AP Photo/Alex Brandon)
Originally Published: September 30, 2025 at 10:01 AM PDT
