Pfizer strikes $70B deal with Trump to cut Medicaid drug prices, expand U.S. manufacturing under tariff threat

Core Points - Pfizer has agreed to lower prescription drug costs for Medicaid as part of a deal with the Trump administration, with similar agreements expected with other drugmakers [1][3] - The deal includes most-favored-nation pricing for Medicaid, ensuring that prices for newly launched drugs match the lowest prices in other developed countries [2][3] - Pfizer will invest $70 billion in domestic manufacturing, focusing on U.S. research, development, and capital projects [6] - A new website, TrumpRX, will allow consumers to purchase drugs directly from manufacturers at an average discount of 50% [7] - The agreement is part of a broader initiative by the Trump administration to lower drug prices and increase U.S. drug manufacturing [8][10] Pricing and Impact - Consumers are not expected to see lower prices until 2026, which could help state budgets for Medicaid [4] - Lower drug prices will also benefit uninsured patients, although significant discounts may still leave them with high out-of-pocket costs [5] - The U.S. prices for brand-name drugs can be up to three times higher than averages in other countries, highlighting the need for price reductions [10] Political Context - The deal builds on an executive order from May that set a deadline for drugmakers to lower prices or face new limits [3] - Trump has used the threat of tariffs as leverage to negotiate these deals, although this could potentially raise drug prices [8] - The political landscape includes ongoing discussions about reversing Medicaid cuts and extending tax cuts related to health insurance premiums [12][13]