President Trump and the CEO of Pfizer announced a deal to lower certain prescription drug prices, cut out pharmacy benefit managers, and move towards the President’s “most-favored nation” pricing plan. The deal entails: (1) Pfizer offering almost all of its drugs to Medicaid at “most-favored nation” prices, meaning the lowest net price paid in other wealthy countries, where drugs often sell for less; (2) Pfizer agreeing it won’t charge more in the U.S. for new drugs it launches than in other wealthy countries, though there’s no cap on those launch prices; (3) Drugs being offered directly to consumers through a yet-to-be-launched federal government website dubbed “Trump Rx” at discounts if they don’t use insurance and pay cash; and (4) Pfizer investing $70 billion in U.S. manufacturing and research, and being exempted from recently announced tariffs for three years.
It’s unclear how many drugs in total would be offered, but the White House said some drugs included would be: Eucrisa, a dermatitis treatment; Xeljanz, a pill for rheumatoid arthritis; and Zavzpret, a treatment for migraines. It is also unclear if the TrumpRx website will be useful to Americans who are already covered by private insurance, Medicare or Medicaid. More companies are expected to follow Pfizer’s lead on drug pricing as President Trump said his Administration is working with other companies to soon secure “similar agreements,” specifically naming Eli Lilly as one of the companies in negotiations with the Administration.