President Donald Trump announced Tuesday that Pfizer will voluntarily reduce prices on some products it sells to U.S. consumers. The pharmaceutical giant will provide prescription drugs to the Medicaid system at the typically lower price offered in Europe, and any new drugs will be sold at prices that are similar to those in other developed countries.
At a press conference in the Oval Office, Trump and his top health officials also said that Pfizer will offer medications directly to consumers on a new website called TrumpRx, at an average discount of 50%. The White House said the website is still under construction but is expected to list drugs from multiple manufacturers when it goes live in early 2026.
The White House said Pfizer has agreed to spend $70 billion on new facilities and research in the U.S. The agreement secures a three-year reprieve from tariffs for products Pfizer imports from plants outside the U.S.
Pharma in the crosshairs: Trump has been pushing drug companies to lower their prices, pointing out that many drugs sold in the U.S. are much cheaper overseas while demanding that producers match the lowest price they offer in other developed countries, which he calls the most-favored-nation price.
Trump has repeatedly threatened to impose tariffs on pharmaceutical imports, and last week announced that a 100% tariff on “any branded or patented pharmaceutical product” would be imposed starting on October 1 — with an exception granted for products made by companies that are building factories in the U.S.
Commerce Secretary Howard Lutnick, whose department is responsible for determining whether specific product categories should be shielded by tariffs on national security grounds, said he is waiting for other drug companies to complete their talks with the federal government before making any final decisions on pharmaceuticals.
“While we’re negotiating with these companies, we’re going to let them play out and finish these negotiations,” Lutnick told reporters at the White House.
Details unclear: Trump said that getting drugs at “most-favored-nation's prices” would help reduce the cost of Medicaid “like nothing else,” but there are still many unanswered questions about how the discounts and the new TrumpRx program will work. Among other things, most Americans get their medications through insurance programs, and it’s not clear whether private insurance or Medicare prices will be affected by the agreement.
There’s also the question of how low prices can go, an especially tricky matter when Trump promises reductions upwards of 1,000% – a mathematical impossibility.
Hannah Katch, a senior Medicaid official during the Biden administration, said the savings may not add up to much. “We don’t yet know specifics, but it’s hard to imagine that states and the federal government are going to save much money based on this announcement,” she told The Washington Post.
Pfizer shares rose after the announcement, with analysts saying the terms of the agreement could have been worse for the company by requiring a larger discount on a wider array of drugs. Investors were also pleased that the deal likely protects the company from tariffs that Trump could impose in the future.