Trump secures agreements with Merck, Amgen, Novartis and others to cut drug prices under Medicaid
Trump unveiled drug pricing deals with leading pharmaceutical companies that promise “massive savings” for Medicaid patients and lower cash-pay prices, while offering firms tariff exemptions and regulatory certainty.
US President Donald Trump on Friday (December 19) announced agreements with nine major pharmaceutical companies to sharply cut the prices of medicines sold through the government’s Medicaid program and to cash-paying consumers, marking his latest push to bring US drug costs in line with those in other wealthy nations.
The deals were unveiled at a White House press conference, where Trump appeared alongside senior executives from the participating drugmakers.
“We were subsidizing the entire world. We’re not doing it anymore,” Trump said.
Drugmakers sign on
Companies that have agreed to the pricing deals include Bristol Myers Squibb, Gilead Sciences, Novartis, Amgen, Boehringer Ingelheim, Sanofi and GSK, along with Merck and Roche’s US unit Genentech.
Mehmet Oz, director of the Centers for Medicare and Medicaid Services, said additional companies — Regeneron, Johnson & Johnson and AbbVie — are expected to visit the White House after the holidays for the launch of the administration’s TrumpRx website.
Medicaid price cuts, ‘massive savings’ promised
Under the agreements, drugmakers will reduce prices on most medicines sold to Medicaid, which serves low-income Americans. Senior administration officials promised “massive savings” on widely used drugs, though they did not provide specific figures.
US patients currently pay the highest prescription drug prices globally, often nearly three times more than patients in other developed countries — a gap Trump has repeatedly targeted.
Cash-pay discounts, global price alignment
Officials said the deals also include commitments to cut direct-to-consumer cash prices for select medicines, potentially sold through TrumpRx.gov.
Companies have also agreed to launch new drugs in the US at prices equal to — but not lower than — those in other wealthy countries, and to expand domestic manufacturing. In return, participating firms will receive a three-year exemption from tariffs.
Drugmakers also committed to so-called “most-favored-nation” pricing across commercial, government and cash-pay markets, including Medicare.
Merck, Amgen outline specific cuts
Merck said it will sell its diabetes drugs Januvia, Janumet and Janumet XR directly to US consumers at discounts of about 70% off list prices. If approved, its experimental cholesterol drug enlicitide will also be offered through direct-to-consumer channels.
Amgen said it will expand its direct-to-patient program to include migraine drug Aimovig and arthritis treatment Amjevita, pricing both at $299 per month — nearly 60% and 80% below current US list prices, respectively.
Investment pledges and revenue sharing
The companies collectively pledged to invest more than $150 billion in US research, development and manufacturing, though officials did not clarify how much reflects new commitments. Merck alone said it would contribute $70 billion.
Officials also said a portion of each company’s overseas revenue would be remitted to the US to help offset domestic drug costs, and several companies agreed to donate drug ingredients to the US strategic reserve.
Industry reaction and investor concerns
Five drugmakers — Pfizer, Eli Lilly, AstraZeneca, Novo Nordisk and EMD Serono — had already struck similar deals with the administration. AbbVie is expected to announce its agreement shortly.