President Trump on Monday announced the next round of pricing deals with drugmakers, with nine new companies joining the 17 that reached agreements with the administration previously. The new companies striking deals include Alcon, Astellas, BeOne, BridgeBio, CSL, Sun Pharma, Kyowa Kirin, Teva, and UCB.
What the deals require
The companies made pledges similar to those made by larger drugmakers before them. They committed to selling new medications to U.S. patients at prices comparable to the lowest prices in peer countries. They also agreed to offer their drugs to state Medicaid programs at “most-favored nation” prices. Some companies will bolster domestic manufacturing and contribute to the U.S. medical stockpiles. In return, it’s believed at least some of the companies will avoid tariffs.
UCB, Sun Pharma, Teva, and Astellas will, together, contribute 290 metric tons of active pharmaceutical ingredients to the country’s strategic reserves. All of the new companies except BridgeBio are headquartered outside the U.S.
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Context behind the agreements
The agreements come after months of biotech and pharma companies sought deals with the administration to avoid what they see as price controls through Medicare pilot programs that would have linked the cost of drugs in the U.S. to their prices in other countries. Health secretary Robert F. Kennedy Jr. said on Monday nine out of 10 drugs prescribed in the U.S. were now covered by the deals.
These voluntary arrangements represent an effort by drugmakers to stay on the administration’s good side while avoiding more sweeping regulatory changes. Whether that strategy pays off for patients remains to be seen. The details of the new deals, including the impact on Medicare, have not been publicly released, making it difficult to assess their real-world effect.
It’s not clear what effect these agreements will have on drug costs and accessibility. Medicaid already receives the lowest drug prices out of any payer in the U.S. Additionally, two of the companies making new deals, Teva and Sun Pharma, specialize in making generic drugs.
Administration’s push for broader coverage
The new deals are the latest expansion of Trump’s drug pricing agenda, which has become a centerpiece of the administration’s plans to reform American health care. In April, administration officials promised to work out agreements with the “many hundreds” of other drugmakers. Kennedy said Monday that the president, through a series of “very, very emotional conversations,” made clear he and Centers for Medicare and Medicaid Services Administrator Mehmet Oz could lose their jobs if they didn’t deliver drug pricing deals. “I didn’t want to fire a Kennedy,” Trump said. “I wasn’t going to do that.”
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The White House has repeatedly declined to make the details public while pushing Congress to codify the agreements. Administration officials have touted declines in drug prices in the U.S., though Trump’s signature TrumpRx drug purchasing platform has fallen short of its grand goals.
Industry’s cautious engagement
The voluntary agreements do not mean drugmakers are in full agreement with the administration’s aims. Officials have tried, and failed, to get company leaders to endorse its drug pricing legislation. And drugmakers are still considering their legal options to overturn the administration’s drug pricing policies.
Still, private sector leaders have taken officials up on voluntary, private deals that end with this administration.