Pfizer CEO Albert Bourla directly credited the threat of tariffs with leading to the deal, in which the company will offer drugs on a soon-to-be-launched website called TrumpRx.
In a Tuesday morning press conference in the Oval Office, President Donald Trump, flanked by a coterie of cabinet officials, agency regulators and Pfizer CEO Albert Bourla, announced that the company has struck a deal with the federal government to offer some of its drugs at reduced prices.
The deal contains multiple parts. The first is that most of Pfizer’s primary care drugs, along with some drugs for specialty indications, will be available at an average discount of 50% on “TrumpRx,” a soon-to-be-launched website.
In return, Pfizer will receive a three-year grace period reprieve from the effects of potential pharmaceutical tariffs, as long as the company continues investing in U.S. manufacturing. Pfizer announced during the press conference that it will pump an additional $70 billion into its U.S. manufacturing footprint. Bourla directly credited the threat of tariffs with the company’s willingness to work with the administration.
“In our industry, we had two major overhangs that . . . create concerns for us in our ability to invest,” Bourla said. The first, he continued, is the uncertainty of tariffs, “because the president is absolutely right; tariffs are the most powerful tool to motivate behaviors, and they clearly motivated us.” The second, Bourla said, is what will happen with the framework of pricing in the U.S. “We are addressing both of them right now.”
While Pfizer said it is offering these prices to Medicaid recipients, it was not clear from the announcement how the company’s agreement—or any other similar agreement with other pharma companies—would align with private health insurance practices in the U.S. Trump noted the White House has been in talks with other Big Pharmas, specifically highlighting that “Eli Lilly has been fantastic.”
The third part of Pfizer’s agreement is parity, where the New York–based company will ensure U.S. patients receive prices similar to those of other similar, developed countries, a key plank in the president’s oft-repeated Most Favored Nations drug pricing scheme.
Medicare Director Chris Klomp spoke at length during the announcement, touting the arrangement.
“This is direct access for patients at Trump RX,” he said of the site, “available often at full MFN and always at lower prices than currently available. This is bypassing middlemen.”
“This is American ingenuity, outsmarting the system.”
Klomp walked away from the lectern to a poster board on the other side of the Oval Office to note price reductions on four of Pfizer’s drugs, including Eucrisa for atopic dermatitis (discounted at 80%), Duavee for post-menopausal osteoporosis (85%) and Xeljanz for rheumatoid arthritis (40%).
The S&P’s XBI biotech index has not moved significantly on the news, though the shares of individual pharma companies that have announced manufacturing pushes in the U.S. of the type that Pfizer said spared it from tariffs have gone up. Pfizer is up 7.5%, AstraZeneca 3.5%, Merck 5%, Eli Lilly 3.5% and Amgen is up 3%.
