Trump said the nine-company agreements will cut prices on outpatient medicines and align what state Medicaid programs pay with the prices those firms charge in other countries. The affected products include treatments for chronic and rare conditions, including hemophilia, liver ailments, dermatologic disorders, and some cancers.
The announcement follows a series of earlier agreements under the administration's "most favored nation" policy. In May 2025, Trump issued an executive order reinstating that policy, with instructions to lift prices outside the U.S. and to "end global freeloading." In the past year, 17 additional pharmaceutical companies - among them Pfizer, Eli Lilly and Novo Nordisk - entered agreements.
The "most favored nation" deals already signed have reshaped major drugmakers' business tactics, profit margins, and manufacturing pipelines. To hedge against possible future tariff risks, companies are investing billions of dollars to reshore production. They are also rapidly scaling direct-to-consumer channels, among them selling medicines through the president's TrumpRx portal. In the U.S., lower prices are squeezing profits; manufacturers such as Novo Nordisk have said it will take time for prescription growth to make up for the revenue decline.
A 2024 Rand Corp study found average U.S. prescription drug prices are nearly three times those abroad, and that brand-name therapies cost more than four times as much. The trade association PhRMA has argued that most-favored nation pricing is not the right tool to cut U.S. drug costs, placing much of the responsibility on pharmacy benefit managers for the disparity. The U.S. remains the most critical market for many drugmakers; despite being headquartered in Europe, half of the continent's ten largest pharma companies derive most of their revenue from the U.S.
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These voluntary deals extend a policy push the administration is highlighting ahead of the midterm elections and involve companies that collectively account for a large share of U.S. drug sales. Investors should watch how pricing, market mix and capital spending evolve, particularly for European firms that still lean heavily on U.S. demand.
