Astrazeneca reaches an agreement with the Trump administration to lower drug prices in the United States in exchange for a three-year tariff exemption period
U.S. President Trump announced an agreement with Astrazeneca, under which the latter will significantly reduce the prices of certain medications in exchange for a three-year tariff exemption. Astrazeneca has committed to providing discounts on its prescription drug products for Americans and will keep new drug prices in line with the lowest levels in comparable countries. Additionally, Astrazeneca will expand the products available on its direct sales website to sell at lower prices. The agreement aims to reduce healthcare costs for the American public
According to the Zhitong Finance APP, on October 10 local time, U.S. President Trump announced that his administration has reached an agreement with AstraZeneca (AZN.US), whereby the latter will significantly reduce consumer prices for certain medications in exchange for tariff relief. Trump announced this news on Friday in the Oval Office, stating, "As the largest pharmaceutical company in the UK, AstraZeneca has committed to providing substantial discounts to Americans on its extensive prescription drug product catalog."
It is worth mentioning that this is the second major agreement the White House has reached with pharmaceutical companies to lower healthcare costs for the American public. Last week, U.S. pharmaceutical giant Pfizer (PFE.US) also reached a similar agreement with the Trump administration, which will implement several measures to reduce drug prices in the U.S. and received a three-year exemption from drug tariffs—provided that the company further increases its production investment in the U.S. It is reported that Pfizer plans to invest $70 billion to bring drug production and R&D facilities back to the U.S.
Similar to the agreement reached with Pfizer, AstraZeneca will significantly lower drug prices in exchange for a three-year exemption from pharmaceutical tariffs. The prices of all new drugs launched by the company in the U.S. will be aligned with the lowest levels in comparable countries. Additionally, the company will supply drugs to the Medicaid program, which targets low-income and disabled individuals, at significantly discounted prices. This British pharmaceutical company will also expand the products sold on its direct sales website "AstraZeneca Direct" at the "substantially reduced" prices mentioned by Trump and will offer these drugs on the TrumpRx website.
AstraZeneca CEO Pascal Soriot stated that as part of the agreement, the company will be exempt from pharmaceutical industry tariffs. AstraZeneca had previously announced in July that it would invest $50 billion in the U.S. by 2030.
The financial impact of this agreement is currently unclear. Since most of the drugs sold by AstraZeneca in the U.S. are produced locally, the threat of tariffs it faces is relatively limited. In September, AstraZeneca launched a new direct sales platform where patients can purchase diabetes medication Farxiga and asthma inhaler Airsupra at discounts of up to 30%. Additionally, it is expected that the drugs AstraZeneca will reduce prices for under this agreement include Airsupra, Farxiga, and the chronic obstructive pulmonary disease (COPD) medication Bevespi. Farxiga was AstraZeneca's best-selling drug last year, with sales reaching $7.7 billion, but the price of this drug was already set to be lowered after being included in the Medicare drug price negotiation plan in 2026.
Trump is working to push pharmaceutical companies to lower drug prices in the U.S. This summer, Trump sent letters to the 17 largest pharmaceutical companies globally, outlining several demands, including: lowering drug prices for the Medicaid program for low-income and disabled populations, directly selling discounted drugs to patients, and maintaining the same pricing levels as other developed countries when launching new drugs in the U.S.
Reaching agreements with Pfizer and AstraZeneca will further advance the Trump administration's efforts to lower drug prices and may attract other pharmaceutical companies to join the negotiations. Trump stated that his goal is to reach pricing agreements with other major pharmaceutical companies in the coming weeks Trump also stated that pharmaceutical companies and other firms have invested as much money as possible due to the threat of rising tariff costs.
Initially, investors were concerned that tariffs and drug pricing regulations would significantly impact pharmaceutical company profits. However, as multiple agreements were rolled out, Wall Street gradually believed that the commitments made by these drug companies would have a far lower financial impact than initially expected
