President Donald Trump and nine major pharmaceutical companies announced deals Friday that will lower drug prices for the government’s Medicaid program and cash payers in an effort to bring U.S. costs in line with other wealthy nations.
Bristol Myers Squibb, Gilead Sciences, Merck and Genentech, the American unit of Roche, reached agreements. Novartis, Amgen, Boehringer Ingelheim, Sanofi and GSK have also joined.
“We were subsidizing the entire world. We’re not going to do that anymore,” Trump said at a White House news conference, flanked by nine pharmaceutical company executives.
Mehmet Oz, director of the Centers for Medicare and Medicaid Services, said Regeneron, Johnson & Johnson and AbbVie will visit the White House after the holiday to launch the TrumpRx government website.
Under the terms of the agreements, each drugmaker will reduce prices on most drugs sold to the Medicaid program for low-income people, senior administration officials said, promising “tremendous savings” on widely used medicines without disclosing specific numbers.
Currently, patients in the U.S. pay by far the highest prices for prescription drugs, often nearly three times more than in other developed countries, and Trump has been pressuring drugmakers to reduce their prices to the levels charged by patients elsewhere.
Details of each agreement were not immediately released, but officials said they included measures to reduce direct-to-consumer prices for selected drugs potentially sold through TrumpRx.gov, to launch drugs in the U.S. at prices equal to, not lower than, those in other wealthy countries, and to increase production. In return, companies can receive tariff exemptions for three years.
Merck announced it will sell its diabetes drugs Januvia, Janumet and Janumet XR — which face generic competition next year — directly to U.S. consumers at discounts of about 70% off list prices.
If approved, its investigational cholesterol drug, enlicitide, will also be offered through direct-to-consumer sales channels.
Enlicitide is one of two Merck drugs expected to receive an expedited review under the FDA’s new accelerated process, as previously reported by Reuters.
Amgen announced it will expand its direct-to-patient sales program to include migraine drug Aimovig and rheumatoid arthritis drug Amjevita, offering both for $299 per month — nearly 60% and 80% below current U.S. list prices.
In July, Trump sent letters to the leaders of 17 major drugmakers, urging them to offer Medicaid so-called most-favored-nation prices and to ensure that new drugs are launched at prices no higher than those in other rich countries.
Five companies had already signed agreements with the government to contain prices: Pfizer, Eli Lilly, AstraZeneca, and EMD Serono, the North American division of the German Merck KGaA.
The remaining three companies that have not yet announced deals are Regeneron, Johnson & Johnson and AbbVie. Reuters had previously reported that AbbVie was expected to announce a deal on Friday.
Investors initially feared sweeping price controls in the US, but details of recent agreements have eased those concerns considerably.
On Friday, drugmakers committed to adopting the “most favored nation” principle for all new drug launches in the U.S. in all markets, including Medicare, for people 65 and older, officials said.
A portion of revenue from each company’s international sales will also be remitted to the U.S. to offset costs, officials said.
The companies have committed to collectively investing more than $150 billion in the U.S. in research and development and production, officials said, although it is unclear whether that includes prior commitments. Several have also agreed to donate pharmaceutical ingredients to the US strategic reserve.
Merck said it contributed $70 billion of that amount.
Analysts have noted that Medicaid, which accounts for only about 10% of U.S. drug spending, already benefits from substantial price discounts, which in some cases exceed 80%.
Pfizer, which announced its 2026 financial projections on Tuesday, said Medicaid rebates will result in price and margin compression next year.
