A New Era in Prescription Drug Pricing
President Donald Trump will announce Tuesday that his administration has reached an agreement with Pfizer for it to voluntarily sell its drugs at lower prices, according to a White House official. However, the official did not specify which drugs would be affected or by how much. Nor was it clear whether the lower prices would be available only for people on government insurance such as Medicaid or those with private insurance.
Pfizer, one of the largest drugmakers in the U.S., produces a range of medications, including the blood thinner Eliquis, the cancer drug Ibrance, and the Covid vaccine. The deal is part of Trump’s broader effort to implement a 'most favored nation' pricing model, which aims to ensure the U.S. pays no more than the lowest prices charged in other wealthy countries. This model would require pharmaceutical companies to charge prices comparable to those in countries like Germany or Canada.
In May, Trump signed an executive order outlining the initiative, directing federal officials to pursue a plan that would tie the amount the government pays for certain drugs to the prices paid overseas. Pfizer, the first drugmaker to announce a deal under the plan, will reportedly reduce prices across the board, a White House official said. The company will also sell its drugs via a 'direct to consumer' website called 'TrumpRx,' which the official described as a strategic move to increase accessibility.
Pfizer will also announce a $70 billion investment in research and development and domestic manufacturing, the official stated. However, the company did not immediately respond to a request for comment.
Prescription drug prices in the U.S. are notoriously higher than in other wealthy nations. A 2022 survey by KFF, a nonpartisan health policy research group, found that 3 in 4 U.S. adults say the cost of medications is unaffordable. This is a developing story; please check back for updates.
Berkeley Lovelace Jr. is a health and medical reporter for NBC News. He covers the Food and Drug Administration, with a focus on Covid vaccines, prescription drug pricing, and healthcare. Previously, he covered the biotech and pharmaceutical industry for CNBC.
