President Donald Trump on Friday (Oct 10) announced a new agreement with UK-based pharmaceutical giant AstraZeneca (AZN.L), under which the company will provide discounted medicines to the U.S. government’s Medicaid program in return for tariff exemptions. The deal mirrors a similar arrangement reached with Pfizer (PFE.N) the previous week.
The White House said these agreements form part of a broader strategy to curb high prescription drug prices in the United States. In July, Trump had sent letters to 17 major drugmakers demanding price cuts. AstraZeneca and Pfizer are the first to finalize deals with the administration.
AstraZeneca CEO Pascal Soriot, speaking at the Oval Office event, said the company would offer some of its medicines at up to 80% off their list prices through the upcoming TrumpRx website, expected to launch next year. In exchange, the company will receive a three-year tariff exemption to localize more of its production in the U.S.
U.S. Drug Prices Remain Highest Globally
American patients continue to pay nearly three times more for prescription drugs than those in other developed countries. Trump has repeatedly pressured pharmaceutical companies to align U.S. prices with international levels or face tariffs of up to 100%. The administration’s threats have intensified since earlier negotiations faltered, prompting drugmakers to reach agreements to avoid trade penalties.
More than 70 million Americans rely on Medicaid, a joint state-federal health program for low-income individuals. While Medicaid already benefits from the lowest drug prices in the country, experts say the new deal may bring only limited additional savings.
Craig Garthwaite, professor at Northwestern University’s Kellogg School of Management, noted that AstraZeneca’s product range is unlikely to yield “significant new discounts” for Medicaid. Meanwhile, Boston University’s Rena Conti said the arrangement may benefit the companies more than consumers, calling its impact on drug affordability “uncertain at best.”
AstraZeneca Expands U.S. Presence
Soriot has been actively strengthening AstraZeneca’s U.S. footprint. The company recently announced a $50 billion investment in American manufacturing and R&D by 2030, including plans to build its largest global facility in Virginia and expand operations in five other states.
In September, AstraZeneca also began selling its diabetes and asthma drugs directly to U.S. patients at discounts of up to 70%, responding to Trump’s push for lower consumer prices.
Emphasizing the company’s growing U.S. identity, Soriot described AstraZeneca as “a very American company” and confirmed plans to list its shares in the United States alongside its existing listings in the UK and Europe.
