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. 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.
Impact on Medicaid and Consumers
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. 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.
Reaction from Experts
But 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. 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.
Trump’s 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 exact terms of the deal are still unclear, the commitment to most-favored-nation pricing and the participation in the TrumpRx website are expected to bring down prices for consumers. However, experts warn that the impact of the deal may be limited, and more needs to be done to address the high cost of prescription drugs in the US.
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, with many treatments offered at discounts that average 50%.
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)
Mehmet Oz, Administrator for the Centers for Medicare & Medicaid Services, speaks in the Oval Office of the White House, Tuesday, Sept. 30, 2025, in Washington, as President Donald Trump, right, and Secretary of Health and Human Services Robert F. Kennedy, Jr., look on. (AP Photo/Alex Brandon)
Mehmet Oz, Administrator for the Centers for Medicare & Medicaid Services speaks in the Oval Office of the White House, Tuesday, Sept. 30, 2025, in Washington, as President Donald Trump looks on. (AP Photo/Alex Brandon)
FILE – The Pfizer logo is displayed at the company’s headquarters, Friday, Feb. 5, 2021, in New York. (AP Photo/Mark Lennihan, File)
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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 1:01 PM EDT
