Trump Drug-Pricing Deals With Major Pharma

On Dec. 19, 2025, the White House announced that Trump drug‑pricing deals would add nine manufacturers, including Merck (MRK), to a Most‑Favored‑Nation (MFN) pricing initiative. The program matches Medicaid and certain cash‑pay prices to European levels in exchange for a three‑year suspension of threatened import tariffs.

Deals, Terms, and Participants

The new agreements include Amgen, Boehringer Ingelheim, Bristol‑Myers Squibb, Genentech (Roche’s U.S. unit), Gilead Sciences, GSK, Merck, Novartis, and Sanofi. With these additions, 14 of the 17 targeted manufacturers have joined the program.

These voluntary contracts overlay the existing Medicaid Drug Rebate Program rather than replacing it. Participating companies agreed to sell most products to state Medicaid programs at prices comparable to those in European countries. The agreements also cover certain high‑cost drugs and require new products launched in the U.S. to have prices close to those in peer economies.

The program expands direct‑to‑consumer cash sales through manufacturers’ online platforms. Patients will access these sites via a federal portal, TrumpRx.gov, which is expected to reach full capacity in January 2026.

Incentives and Market Implications

As a key incentive, manufacturers secured a three‑year suspension of threatened tariffs on imported pharmaceuticals. Negotiations also yielded commitments to domestic investment, with combined new U.S. manufacturing and research and development pledges estimated at about $150 billion. Several companies agreed to donate active pharmaceutical ingredients (APIs) to the Strategic Active Pharmaceutical Ingredients Reserve, a federal stockpile for emergencies.

Officials said the arrangements would generate additional savings for Medicaid and substantial relief for patients. The deals aim to lower Medicaid drug prices by aligning them with European levels and to moderate launch prices for new drugs.

For investors, the agreements combine price pressure in public and cash markets with temporary trade relief and large investment commitments. The tariff suspension and capital pledges are intended to offset revenue risks from European‑indexed Medicaid pricing and potential constraints on launch prices. This trade‑off could affect product revenue and capital allocation decisions at signatories such as Merck.

The initiative also broadens direct‑to‑consumer cash sales, routing patients through TrumpRx.gov to manufacturer platforms offering lower prices. Managed‑care analysts note that MFN pricing may indirectly moderate U.S. launch prices, especially in high‑cost drug classes like GLP‑1 receptor agonists. However, because most Medicare and commercial plans are not directly bound by these agreements, employer premiums and non‑Medicaid out‑of‑pocket costs may see limited near‑term relief.

The program originated from July 2025 letters the administration sent to CEOs of the 17 largest drug manufacturers seeking deals to keep Medicaid drug costs below those in other high‑income countries. Earlier MFN‑style agreements were reached with Pfizer, AstraZeneca, Novo Nordisk, and Eli Lilly.

The White House announced the latest additions during remarks in the Roosevelt Room. The administration expects TrumpRx.gov to be fully operational by January 2026, testing whether expanded direct‑to‑consumer access and the companies’ investment and API commitments will shift how manufacturers price and distribute selected medicines.