NextFin news, WASHINGTON, D.C. — On Tuesday, September 30, 2025, President Donald Trump announced a landmark deal with pharmaceutical giant Pfizer to lower drug prices and invest $70 billion in domestic manufacturing facilities.
Speaking at the White House alongside Pfizer CEO Albert Bourla, Trump described the agreement as a major victory in his ongoing campaign to tackle high prescription drug costs in the United States. Under the deal, Pfizer will offer "most-favoured-nation pricing" to Medicaid, ensuring the company charges Medicaid the lowest price available in any other developed country for its medicines. This pricing model will also apply to newly launched drugs.
Pfizer, headquartered in New York, is one of the largest U.S. drug manufacturers, producing key treatments including the COVID-19 vaccine Comirnaty, Paxlovid, Eliquis, and therapies for cancer and pneumonia. The $70 billion investment is intended to expand Pfizer's manufacturing footprint within the United States, aligning with the administration’s goal to bring more pharmaceutical production back to American soil for economic and national security reasons.
Trump revealed that he used tariff threats as leverage during negotiations with pharmaceutical companies, a tactic he has frequently employed in trade discussions. He acknowledged that while tariffs could have pushed prices higher, the deal was ultimately successful in securing significant price reductions.
"This is something that most people said was not doable," Trump said, highlighting the extensive negotiations and pressure on drugmakers to lower prices.
Pfizer CEO Albert Bourla welcomed the agreement, stating, "I think today we are turning the tide and we are reversing an unfair situation."
The announcement comes amid a looming federal government shutdown and ongoing political debates over healthcare spending. It follows a May executive order from Trump that gave drugmakers 30 days to voluntarily cut prices or face new government payment restrictions.
In addition to the Medicaid pricing agreement, the Trump administration unveiled a new website called TrumpRx to facilitate direct-to-consumer sales of medications at discounted rates, aiming to increase consumer access to affordable drugs.
The deal is part of a broader administration effort to reduce prescription drug costs in the U.S., where brand-name drugs are often priced up to three times higher than in other developed countries. Trump has frequently argued that the U.S. "subsidizes care in other countries" due to inflated drug prices.
Medicaid patients typically pay only nominal co-payments, but the reduced prices are expected to provide significant relief to state budgets that co-fund the low-income healthcare program.
Trump also indicated that other pharmaceutical companies are expected to follow Pfizer's lead in the coming weeks, signaling a potential wider shift in drug pricing policies.
Sources: Reuters, Politico, Mathrubhumi English, The Washington Post
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