Donald Trump announced a deal with the British-based drugmaker AstraZeneca for a “most-favored-nation” drug-pricing model aimed at making prescription medicines more affordable and avoiding the administration’s tariff threats.
The company will sell some medicines at a discount to the government’s Medicaid health plan in exchange for tariff relief, similar to a drug-pricing pact reached last week with Pfizer.
Trump began the Oval Office announcement on Friday evening by boasting that he would have struck the deal sooner, but “we were interrupted by a rigged election”. AstraZeneca CEO Pascal Soriot, who was in attendance, said that during tough negotiations to reach a deal, Trump and his team of officials had “really kept me up at night”.
The deals set a framework the White House will use to try to reach its goal of lowering US prescription medicine prices. The president sent letters to 17 leading drugmakers in July telling them to slash prices. Pfizer and AstraZeneca are the first two companies to reach a deal with the administration.
Under the agreement, AstraZeneca will charge most-favored-nation pricing to Medicaid, while guaranteeing such pricing on newly launched drugs, Trump said. That involves matching the lowest price offered in other developed nations.
“For many years, Americans have paid the highest prices in the world for prescription drugs, by far,” Trump said, adding that the new deal may cut prices to “the lowest price anywhere in the world. That’s what we get.”
Trump went on to repeat the wildly false claim that the discounted prices for American consumers would reduce the price of prescription drugs by up to 1,000%.
As Daniel Dale of CNN explained: “Cutting drug prices by more than 100% would mean that Americans would get paid to acquire their medications rather than paying for them.” A health economist, Timothy McBride, told the network Trump’s claims are “just not logical”, since a 500% price reduction would mean that a drug that now costs $100 would be available for free, with consumers given a $400 rebate.
The actual deal with AstraZeneca includes cutting prices for the government’s Medicaid health plan for low-income Americans and discounted prices through a “TrumpRx” website, the president said.
Pfizer previously agreed to drop prescription drug prices in the Medicaid program for lower-income Americans to what it charges in other developed countries in exchange for relief from tariffs threatened by Trump.
More than 70 million people are covered by Medicaid, the state and federal government program for low-income people. Drug spending in that program is dwarfed by that of Medicare, which covers people aged 65 and older or those with disabilities and is not included in Friday’s announcement.
The Medicaid program already receives the lowest drug prices in the US, so the additional savings may be modest, said Craig Garthwaite, a professor at Northwestern University’s Kellogg School of Management.
“If you look at AstraZeneca’s portfolio, I don’t think there are a bunch of drugs that exist where that’s going to involve them giving a very big discount to Medicaid,” Garthwaite said.
Americans currently pay by far the most for prescription medicines, often nearly three times more than in other developed nations, and Trump has been pressuring drugmakers to lower their prices to what patients pay elsewhere or face stiff tariffs.
Last month, Trump threatened 100% tariffs on drugmakers, increasing pressure on the pharmaceutical industry to agree to price cuts and shift manufacturing to the US.
“The tariffs were a big reason he came here,” Trump said of AstraZeneca’s CEO Soriot.
AstraZeneca’s Pfizer‑like deal may spare it tariffs, but will not move the needle on US rising health insurance premiums and out‑of‑pocket drug costs, said Rena Conti, an associate professor at Boston University.
“It’s good for the companies, and has very uncertain if any benefit for Americans struggling with the affordability of prescription drugs,” Conti said.
