Trump announces agreement with 9 pharmaceutical companies to lower drug prices: 'Affordability in action'

Donald Trump announced a deal with nine pharmaceutical companies to lower the price of various drugs. The president made the announcement at the White House, accompanied by CEOs of major companies in the industry, as well as Health and Human Services Secretary Robert Kennedy Jr. and Centers for Medicare and Medicaid Services Administrator Mehmet Oz.

The companies in question are: Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Genentech, Gilead Sciences, GSK, Merck, Novartis and Sanofi. In return, they will receive tax benefits, tariff exemptions, subsidies and regulatory incentives.

Specifically, the drug companies agreed to sell certain drugs at lower prices in the United States, especially within programs such as Medicaid and in federally driven schemes. The idea is to bring prices closer to those charged by these same companies in other countries in Europe.

According to the White House, these agreements target drugs that treat numerous costly and chronic diseases including Type 2 diabetes, rheumatoid arthritis, multiple sclerosis, asthma, chronic obstructive pulmonary disease (COPD), hepatitis B and C, human immunodeficiency virus (HIV) and certain types of cancer, among others.

In turn, the TrumpRx platform will soon be enabled, where consumers will be able to buy drugs at lower prices than usual, directly aligned with the agreements that the Trump administration negotiated with pharmaceutical companies.

"Starting next year American drug prices will come down fast and furious and will soon be among the lowest in the developed world. (...) As of today 14 out of the 17 largest pharmaceutical companies but they've all agreed have now agreed to drastically lower drug prices for their American patients for the American people and patients this represents the greatest victory for patient affordability in the history of American health care by far," President Trump said during the event.

In addition, Oz singled out pharmaceutical leaders for their "patriotic" decision and remarked on the positive effects this policy will have for families.

"This is affordability in action. We talk about it in abstract, but this is not an abstract concept. This is a very concrete, tangible, personal reality because we've got moms with sick children who cannot afford their medications, working families cannot make ends meet, seniors on fixed income. We have 80 million people have to pay more than $100 a month for their prescriptions. They just can't keep up. So this is a hardcore approach to this, driven by a bold leader who's taking bold action. With that bold action, we've now created a standard for the industry," he added.

The president began pushing for lower drug prices in May, when he formalized this policy with an executive order to seek "most favored nation" pricing. Two months later, the White House contacted major pharmaceutical companies to propose aligning these prices. Since then, agreements have been reached with companies such as AstraZeneca and Novo Nordisk.

The term "most favored nation" comes from international trade law. In this case, it takes as a reference how much other developed countries pay for a drug and set that value as the maximum. It is then negotiated so that pharmaceutical companies sell at that price in the United States.