US President Donald Trump on Friday announced agreements with nine major pharmaceutical companies to lower prescription drug prices in the United States, marking a significant push to align domestic costs with those paid in other rich countries.
The companies include Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Genentech, Gilead Sciences, GSK, Merck, Novartis and Sanofi.
Under the deals, the drugmakers will rein in prices for medicines sold through Medicaid, charging rates comparable to what they levy in other wealthy nations.
New drugs launched by these companies will also follow “most-favored-nation” pricing across all markets, including commercial insurance, cash-pay customers, Medicare and Medicaid, according to news agency AP.
Trump said the agreements would end a system in which US patients paid far more than the rest of the world. “We were subsidising the entire world. We’re not doing it anymore,” he said at a White House press conference, according to Reuters.
US prescription drug prices are often nearly three times higher than those in other developed countries.
The companies also agreed to list pharmacy-ready medicines on a new direct-to-consumer platform, TrumpRx, set to launch in January, allowing patients to buy drugs directly from manufacturers.
As per Reuters, some firms will offer discounts of up to 70% on select medicines, although analysts noted that Medicaid already receives steep rebates.
Bristol Myers Squibb said it would provide its blockbuster blood thinner Eliquis free to Medicaid, a move described by health economist William Padula as “a thoughtful health equity move,” as per AP.
Several companies also pledged to donate active pharmaceutical ingredients to a national reserve for use during emergencies.
Markets reacted positively, with shares of most participating drugmakers rising, Reuters said, as the agreements also grant a three-year exemption from threatened pharmaceutical tariffs in return for commitments to invest in US manufacturing.
Trump said he had warned companies of possible tariffs to push them to “do the right thing,” AP reported.
According to CNBC, the administration has now secured pricing agreements with 14 of the 17 drugmakers it approached earlier this year, with negotiations continuing with the remaining firms.
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Read MoreThe TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.
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