US President Donald Trump announced his second agreement with a major pharmaceutical company to provide low-cost prescription drugs directly to American consumers.
The agreement concerned AstraZeneca, a multinational company based in the United Kingdom.
Recommended stories
list of 3 itemsend of list
President Trump publicly cemented the agreement on Friday by welcoming the company’s CEO, Pascal Soriot, to the Oval Office. He called it “another historic achievement in our quest to lower drug prices for all Americans.”
“Americans can expect discounts, and as I said, in many cases well over 100 percent,” Trump said.
Similar to previous press appearances, he promised that American consumers would receive impossible discounts on popular medicines.
For example, Trump said inhalers for asthma treatment will be discounted by 654 percent, calling the device “hot medicine.” He also reiterated his previous claim that some drugs could offer “1000 percent reductions.”
President Trump has long pushed to lower the cost of prescription drugs to what he charges “most-favored-nation prices.”
That would bring prices down to the same level as in other developed countries, but Trump, in typical hyperbole, said the policy amounted to “the lowest prices anywhere in the world.”
AstraZeneca is the second major pharmaceutical company to make such a deal, after Pfizer. Last month, Pfizer announced a “voluntary agreement” that would bring the price of its products “on par with other major developed markets.”
Like AstraZeneca, the company has agreed to participate in an online direct-to-consumer marketplace called TrumpRx that the Trump administration plans to launch.
But Pfizer clarified in a news release on its website that the deal will help avoid high tariffs that President Trump has threatened against foreign drug companies.
“This provides us with much-needed certainty and stability on two important fronts: tariffs and prices, keeping industry valuations at historically low levels,” said Pfizer CEO Albert Bourla.
At an Oval Office ceremony on Friday, officials including Health and Human Services Secretary Robert F. Kennedy Jr. publicly praised the power President Trump has wielded through the threat of tariffs.
“The president saw something that we didn’t see, and that was that we had influence, and that came through Howard[Lutnick]and the tariffs,” Kennedy said, nodding to Trump’s Commerce Secretary. “We had extraordinary leverage to get these deals done.”
The agreements with AstraZeneca and Pfizer came after President Trump threatened in September to impose 100% tariffs on drugmakers if they did not start building manufacturing plants in the United States.
“Therefore, once construction begins, there will be no tariffs on these medicines,” Trump wrote on his Truth Social platform.
These tariffs were scheduled to go into effect on October 1st, but Pfizer announced an agreement with the Trump administration on September 30th, after which the tariffs were postponed.
Appearing in the Oval Office on Friday, Soriot acknowledged that he had negotiated a tariff extension for AstraZeneca as well as Pfizer. In return, he pledged to increase U.S. investment to $50 billion by 2030.
“We are very grateful to Secretary Lutnick for granting us a three-year tariff exemption to allow us to domestically produce the remaining products,” Soriot said. “Most of our products are manufactured domestically, but the rest has to be moved to this country.”
Just the day before, AstraZeneca announced it would build a “multibillion-dollar drug substance manufacturing center” in Virginia focused on chronic diseases, a top priority for the Trump administration.
Trump himself touted the threat of tariffs as the catalyst for a series of recent drug deals. When asked by a reporter if there were other ways he could have brought drug companies to the negotiating table, President Trump was candid.
“I wouldn’t have been able to take him,” he replied, gesturing to Soriot. “I don’t know what Mr. Pascal meant, but he was saying behind the scenes that tariffs were a big reason why he came here.”
Since returning for a second term as president, Republican leaders have relied heavily on tariffs and the threat of tariffs as a cudgel to align foreign governments and businesses with the administration’s priorities.
He called the term “tariff” the “most beautiful word” in the dictionary and repeatedly named the day on which import taxes were announced as “Liberation Day.”
But earlier this year, it was unclear whether his saber-rattling would pay off. For example, President Trump issued an executive order in May calling on the government to take “all necessary and appropriate actions” to penalize countries with policies that he understands drive up U.S. drug costs.
He also called on Secretary Kennedy to lay the groundwork for a “direct-to-consumer” purchasing program that would allow drug companies to sell their products at discounted prices.
But President Trump lacked a legal mechanism to force participation in such a plan.
In July, it stepped up its pressure and sent letters to major drug manufacturers. The letter warned drug companies to lower prices or the government would “develop all means necessary” to end “unfair drug pricing practices”.
He also publicly mused about raising tariffs on imported medicines that month.
At a cabinet meeting in July, President Trump said, “We’re planning to make some announcements soon regarding pharmaceuticals.” “We’re going to give people about a year, a year and a half to come into the country, and then we’re going to impose tariffs on medicines if they have to come into the country.”
“They will be subject to tariffs at very high rates, such as 200 percent,” he added.
The “most-favored-nation” pricing system is an idea that President Trump tried to institute during his first term as president, from 2017 to 2021, but failed.
It remains to be seen how that project will take shape in his second term. The TrumpRx website (which the president claims did not identify himself) does not yet offer any services.
They are expected in 2026.
