Trump and nine drugmakers strike deals to cut medicine prices for Medicaid and cash payers, aiming to align US drug costs with other nations.
President Donald Trump announces agreements with major pharmaceutical companies to lower drug prices at the White House (Photo: File)
WASHINGTON: U.S. President Donald Trump and nine major pharmaceutical companies on Friday announced deals that will slash the prices of their medicines for the government's Medicaid program and for cash payers, in his latest hid to align U.S. costs with those in other wealthy nations. Bristol Myers Squibb, Gilead Sciences. Merck and Roche's U.S. unit Genentech have struck deals. Novartis, Amgen, Boehringer Ingelheim, Sanofi and GSK have also signed on.
"We were subsidizing the entire world. We're not doing it anymore. Trump said at a White House press conference, flanked by nine drugmaker executives. U.S. patients currently pay by far the most for prescription medicines, often nearly three times more than in other developed nations, and Trump has been pressuring drugmakers to lower their prices to what patients pay elsewhere.
Despite the announcements, shares of most of the drugmakers rose about 1% to 3% as the deals removed Trump's threat of tariffs for three years and investors downplayed the impact of the price cuts the White House said were up to 70% off list prices. Companies already give substantial after market discounts on most list prices.
"These deals re-affirm that the pharma leaders have taken this opportunity to collaborate with this administration to deliver headlines and minimize any step-change in company economics from these deals, Bernstein analyst Courtney Breen said, adding that Gilead is likely the largest beneficiary given its Medicaid exposure. Mehmet Oz, the director of the Centers for Medicare and Mediraid Service, said Regeneron, Johnson & Johnson, and AbbVie would visit the White House after the holidays for the launch of the government's TrumpRx website. All three companies confirmed they were in conversations with the administration.
Under the deals, each drugmaker will cut prices on most drugs sold to the Medicaid program for low-income people, senior administration officials said, promising "massive savings on widely used medicines. Analysts have noted that Medicaid, which accounts for only around 10% of US. drug spending, already benefits from substantial price discounts, exceeding 80% in some cases.
Agreements included cutting cash-pay, direct-to-consumer prices of select drugs sold potentially through the TrumpRx.gov website, launching drugs in the US, at prices equal to those in other wealthy nations and to increase manufacturing. In return, companies can receive a three-year exemption from any tariffs. Most Americans with health insurance pay for drugs with set co-pays or co-insurance based on the list price. They may not be helped by TrumpRx, which will direct customers to drug makers' websites where they will sell their product to cash-pay customers. Merck said it will sell its diabetes drugs Januvia, Janumet and Janumet XR set to face generic competition next year directly to US. consumers at about 70% off list prices.
