President Donald Trump announced deals with nine major pharmaceutical companies to reduce drug prices for the Medicaid program and for cash-paying patients, an effort to bring U.S. drug costs in line with those in other wealthy nations. The companies involved include Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Genentech, Gilead Sciences, GSK, Merck, Novartis, and Sanofi. These agreements mean that about 30% to 40% of drugs these companies sell to Medicaid that were previously priced higher than in other nations will now be subject to price cuts.
The deals also involve the companies listing their most popular drugs on Trump's upcoming direct-to-consumer website, TrumpRx, set to launch in January. Through TrumpRx, patients will see significant price reductions. For instance, Sanofi will offer discounts of nearly 70% on certain medicines for infections, cardiovascular, and diabetic conditions, and will list its insulin products at $35 per month's supply. Merck will offer three diabetes medications—Januvia, Janumet, and Janumet XR—at a roughly 70% discount to cash-paying patients, and Amgen will expand its direct-to-patient program to include its preventative migraine medication Aimovig and autoimmune treatment Amjevita at 60% and 80% discounted monthly prices, respectively.
Specific examples of price reductions on TrumpRx include Amgen's cholesterol-lowering drug Repatha falling from $573 to $239, Bristol Myers Squibb's HIV medication Reyataz decreasing from $1,449 to $217, and Gilead Sciences' Hepatitis C medication Epclusa reducing from $24,920 to $2,425. GSK will also cut the price of its popular asthma inhaler Advair Diskus 500/50 from $265 to $89. In addition to price cuts, the agreements require the pharmaceutical manufacturers to collectively invest at least $150 billion in U.S. manufacturing in the near term and to donate active pharmaceutical ingredients for key products to the Strategic Active Pharmaceutical Ingredients Reserve (SAPIR).
Despite these announcements, shares of most of the involved drugmakers rose about 1% to 3%. This investor reaction is attributed to the deals removing Trump's previous threat of tariffs for three years and investors downplaying the potential financial impact of the price cuts. Merck CEO Robert Davis publicly expressed support for Trump's goal of driving affordability and access for Americans while also increasing prices outside the United States, indicating industry alignment with certain aspects of the administration's strategy.
