Pfizer Agrees to Cut Drug Prices in Medicaid Deal with Trump Administration

In a consequential move, Pfizer announced a reduction in the prices of prescription drugs within the Medicaid program, following successful negotiations with the Trump administration. This new arrangement will ensure that new medicines are sold at a 'most-favored-nation' price, significantly aligning U.S. drug prices with lower international rates.

President Donald Trump, speaking alongside Pfizer CEO Albert Bourla, emphasized the nation's refusal to further subsidize global healthcare costs. This initiative forms part of a broader strategy by the administration to pressure other pharmaceutical companies to adopt similar price reductions, offering protection against impending tariffs in return.

In a strategic shift, Pfizer committed to a $70 billion investment in research, development, and domestic manufacturing. A three-year grace period has been granted where Pfizer's products won't incur specific pharmaceutical-targeted tariffs. The announcement has sparked proactive adjustments in the industry, potentially signaling the beginning of a more substantial overhaul in U.S. drug pricing policies.

(With inputs from agencies.)