President Donald Trump and nine major pharmaceutical companies on Friday announced deals to slash the prices of their medicines for the government’s Medicaid program and for cash payers, in a move to align U.S.costs with those in other wealthy nations. The declaration, made at a White House press conference, signals a notable shift in the administration’s approach to drug pricing.

Drug Price Cuts Aim to Ease Burden on U.S. Patients

The agreements promise “massive savings” on widely used medicines, though specific figures weren’t immediately released.

  • Deals with nine drugmakers to lower prices for Medicaid and cash-pay patients.
  • Commitment to “most-favored-nation” pricing on new drug launches.
  • Increased U.S. manufacturing and R&D investment pledged.
  • A portion of foreign sales revenues will be remitted to the U.S.
  • Three-year exemption from tariffs.

“We were subsidizing the entire world.We’re not doing it anymore,” Trump declared, standing alongside the executives from the nine drugmakers. The move comes after months of pressure from the administration on pharmaceutical companies to lower prices, which are significantly higher in the U.S. than in other developed nations.

U.S. patients often pay nearly three times more for prescription medicines compared to their counterparts in other wealthy countries, and these deals aim to address that disparity.

Details of each agreement remain undisclosed, but officials stated they encompass commitments to reduce cash-pay prices for select drugs, possibly through the TrumpRx.gov website,and to launch new drugs at prices equivalent to those in other wealthy nations. Increased manufacturing within the U.S. is also part of the agreements.

Cost Cuts Already Taking Shape

Merck announced it will directly sell its diabetes drugs Januvia, Janumet, and Janumet XR – which are slated to face generic competition next year – to U.S. consumers at approximately 70% off list prices. The company also plans to offer its experimental cholesterol drug, enlicitide, through direct-to-consumer channels if approved. Enlicitide is expected to receive expedited review by the FDA, according to previous reports.

Amgen will expand its direct-to-patient program to include migraine drug Aimovig and rheumatoid arthritis medicine Amjevita, offering both at $299 a month – a reduction of nearly 60% and 80% from current U.S. list prices.

The administration initially sent letters in July to leaders of 17 major drugmakers, urging them to adopt “most-favored-nation” pricing for Medicaid and ensure new medicines are launched at prices no higher than those in other developed countries.

Five companies – Pfizer, Eli Lilly, AstraZeneca, Novo Nordisk, and EMD Serono – had previously reached similar agreements with the administration. regeneron,Johnson & Johnson,and AbbVie are scheduled to visit the White House after the holidays to launch the TrumpRx website,according to Mehmet Oz,the director of the Centers for Medicare and Medicaid Service.

Investors initially expressed concerns about potential sweeping U.S. price controls, but the details of the recent deals have largely alleviated those fears. Reports indicated AbbVie was also expected to announce a deal on Friday.

Drugmakers committed to “most-favored-nation” pricing on all new U.S. drug launches across commercial, government, and cash-pay markets, including Medicare for those aged 65 and over. A portion of revenues from each company’s foreign sales will also be remitted to the U.S. to offset costs.

The companies collectively pledged to invest over $150 billion in U.S. research and progress and manufacturing, though it remains unclear if this includes prior commitments. Several also agreed to donate drug ingredients to the U.S. strategic reserve, with Merck contributing $70 billion to that sum.

Analysts point