In an unexpected twist, Eli Lilly is among the pharmaceutical giants likely to jump on the price-cutting bandwagon.
On September 30, officials from the U.S. government announced a groundbreaking agreement with Pfizer, ensuring that drug prices for American consumers will see a much-needed decrease.
This deal includes a key feature: Medicaid programs will now benefit from what is known as “most favored nation” pricing, securing the lowest rates available in developed countries. This change could significantly impact pricing for over 70 million Americans who rely on this health program, asserted a senior administration official during a recent press briefing.
The Reality of Prescription Drug Expenditures
The financial toll of prescription drugs in the United States is staggering, with annual spending running into the hundreds of billions. U.S. consumers pay almost triple the amount for medications compared to their counterparts in other nations, according to a government report from 2024.
The soaring prices are not just a minor annoyance; they represent about 75% of global pharmaceutical profits stemming from American buys. Officials argue that these elevated prices have been the financial backbone for research and development in the pharma sector.
“The United States is done subsidizing the health care of the rest of the world,” declared President Donald Trump, emphasizing a shift in policy priorities on Monday.
Chris Klomp, who holds the title of deputy administrator at the Centers for Medicare and Medicaid Services, shared that while the agreement does not impose any price ceilings, Pfizer still has agreed not to undermine U.S. pricing in other nations.
“Pfizer can choose their pricing strategy as they see fit,” he said. “What we are requesting, and what they have pledged, is that their pricing won’t undercut the United States in other markets.”
Meanwhile, the Pharmaceutical Research and Manufacturers of America, the trade group advocating for drug manufacturers, previously stated in May: “To lower costs for Americans, we need to address the core issues driving U.S. prices higher: foreign nations avoiding their fair share and intermediaries inflating costs for American consumers.”
They further cautioned that “importing drug prices from socialist countries would be detrimental to American patients and employees,” showcasing their ongoing resistance to such pricing reforms.
Trade Policies and Pharmaceuticals
Over the summer, Trump explicitly urged pharmaceutical firms to lower drug prices, detailing that, for Medicaid patients, prices should not exceed those available in other developed countries.
Failure to comply would force the government to use “every tool in our arsenal to protect American families from continued abusive drug pricing practices,” he warned in letters sent to 17 major drug companies, including Pfizer.
The threat of a full 100% tariff on pharmaceutical imports was announced, effective October 1, unless manufacturers start producing their goods domestically.
Albert Bourla, Pfizer’s CEO, remarked that the tariff threat proved effective. “Tariffs are a powerful motivator for behavior, Mr. President; it certainly influenced our actions,” he claimed.
As part of this newly inked agreement, Pfizer has committed to investing a hefty $70 billion into U.S. manufacturing, while enjoying a reprieve from tariffs for three years—a clear indication of the administration’s leverage in negotiations.
A New Digital Approach: Trump Rx
In a bid to enhance access to medications, a forthcoming website, aptly named Trump Rx, aims to provide consumers with reduced prices on various drugs.
<p“No longer will Americans have to make unauthorized trips across the border to Canada in search of better drug prices,” Klomp noted optimistically.
The website is anticipated to launch in early 2026, although specific details are still in the works. Users will enter the name of a medication they’re seeking and be directed to the best purchasing options, whether through manufacturers or their official channels.
For instance, the White House has indicated that medications such as the dermatitis ointment Eucrisa will be available at an astounding 80% discount, while the migraine treatment Zavzpret will be offered at a 50% discount, among others.
Pfizer has said that a significant majority of its primary care treatments, along with some specialty medications, will be offered on this platform with an average discount projected at 50%, with the potential for up to an 85% discount on select items.
Broadening the Pharmaceutical Net
Trump has indicated that efforts are ongoing with other pharmaceutical companies to negotiate similar agreements.
A senior official stated that negotiations have already secured multiple agreements with other manufacturers and that there are more firms willing to discuss further arrangements.
Beyond Pfizer, the companies that received letters from Trump are a notable list including AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, and Johnson & Johnson, among others.
Aside from Pfizer, only Eli Lilly received a direct mention from Trump.
“We believe every American should have access to necessary medications, regardless of economic circumstances. Today’s news from the White House emphasizes the urgent need for affordability in medicines, and we appreciate all measures aimed at helping patients,” a spokesperson from Eli Lilly commented via email to The Epoch Times.
“Lilly is actively engaging with the administration to broaden patient access, maintain innovation, and enhance affordability for our medications. While specifics are still being finalized, we look forward to providing further updates in the near future.”
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