A group of major pharmaceutical companies is expected to announce agreements with the U.S. government to lower prices on some prescription drugs, according to multiple sources familiar with the situation. The move builds on ongoing efforts by the Trump administration to bring American drug costs closer in line with prices seen in other wealthy nations and reduce the burden on public healthcare programmes like Medicaid.
Officials have indicated that global pharma firms including AbbVie, Bristol Myers Squibb, Gilead Sciences, Merck and others will join this latest round of pricing commitments. Alongside them are expected deals involving Swiss-based companies such as Novartis and Roche’s Genentech unit, which Bloomberg reported are nearing final arrangements with U.S. authorities.
The backdrop to these negotiations goes back to July, when the U.S. president sent formal letters to the leaders of 17 major drugmakers. The correspondence outlined expectations for so-called “most-favoured-nation” pricing. Under this approach, companies would provide the U.S. government’s Medicaid programme with prices at least as low as those charged in other high-income countries, and agree not to launch new drugs at prices higher than abroad.
So far, five firms — Pfizer, Eli Lilly, AstraZeneca, Novo Nordisk and EMD Serono — have already struck deals under similar frameworks to rein in costs. The latest expected announcements would expand that list to include more of the industry’s biggest players.
In practical terms, the deals aim to cut prices on medicines that are more expensive in the United States than overseas. Some companies have already signalled how this could work. For example, Merck has said it would sell diabetes treatments such as Januvia and Janumet at steep discounts directly to consumers, while Sanofi plans to offer reductions on treatments for infections and chronic conditions. Discounts on select drugs may be made available through a new government-sponsored online platform called TrumpRx, which is intended to connect patients directly with manufacturers at reduced cost.
The pricing commitments are tied to incentives for the companies. Senior administration officials have said that participating firms could receive exemptions from new tariffs targeting imported pharmaceuticals for a period of years. This tariff relief is seen as a major component in persuading companies to agree to price cuts, while also encouraging more manufacturing investment within the United States.
Industry insiders note that although Medicaid accounts for a relatively small share of overall U.S. drug spending, the programme sets a benchmark for pricing negotiations. Lowering prices for Medicaid could indirectly influence broader market behaviour and set a precedent for future deals that might affect Medicare and private insurance sectors.
Analysts have mixed views on the potential impact of these deals. Some say they could yield significant savings for patients and government programmes, especially for high-cost chronic disease treatments. Others warn that actual savings may be limited because Medicaid already receives deep discounts for many medications compared with retail prices.
Stock markets have reacted cautiously to news of the pricing negotiations. Shares of several drugmakers have shown modest gains in response to the announcements so far, suggesting that investors believe the terms may be manageable for corporate earnings while reducing the risk of more aggressive regulatory action.
Beyond financial implications, the expected deals underscore a growing focus in U.S. policy on drug affordability. The Trump administration has increasingly pushed pharmaceutical pricing onto the national agenda, using a mix of negotiation pressure, tariff threats, and incentives for domestic production to drive lower costs for American consumers.
As the agreements are formally unveiled, observers will watch closely for details on which drugs are affected and how the pricing changes ripple through both public programmes and the wider healthcare market.
