Pfizer Agrees to Lower Drug Prices, Invest $70B in U.S. Manufacturing
In a significant move, Pfizer Inc. has agreed to a deal with the Trump administration to lower drug costs and invest $70 billion in domestic manufacturing. The agreement, which reverses an 'unfair situation' according to Pfizer CEO Albert Bourla, comes after months of President Trump's efforts to reduce drug prices.
The deal involves Pfizer matching the lowest prices offered in other developed nations, a move President Trump had threatened to enforce with tariffs if necessary. This agreement is expected to benefit state budgets funding Medicaid programs, although its direct impact on Medicaid patients' out-of-pocket costs remains unclear.
Under the agreement, Pfizer will charge most-favoured-nation pricing to Medicaid and guarantee pricing on newly launched drugs. Additionally, Pfizer has committed to investing $70 billion in domestic manufacturing facilities, joining other major drugmakers in boosting U.S. drug manufacturing. This investment is part of a broader trend of pharmaceutical companies increasing their domestic production capabilities.
The deal with Pfizer is the latest in a series of agreements President Trump has secured with drugmakers to lower prices. The administration expects more such deals to follow in the coming week. Pfizer, one of the largest U.S. drugmakers, produces a wide range of medications, including the COVID-19 vaccine Comirnaty and treatment Paxlovid.
