Pfizer has agreed to lower prescription drug costs for Medicaid and invest $70 billion in US manufacturing, President Donald Trump announced on Tuesday, in a move aimed at reducing healthcare costs.As of 1:26 PM (GMT-4), Pfizer shares were actively trading at $25.08, marking a sharp 5.14% gain, signaling strong investor interest and positive developments driving the surge.Trump made the announcement alongside Pfizer CEO Albert Bourla at the White House, highlighting the administration’s push to make medicines more affordable, AP reported. Under the deal, Pfizer will offer most-favoured-nation pricing to Medicaid, matching the lowest price available in other developed countries. The company will also guarantee that newly launched drugs follow the same pricing framework.“It’s going to have a huge impact on bringing Medicaid costs down like nothing else,” Trump said, adding, “I can’t tell you how big this is.” The agreement is expected to help state budgets that fund Medicaid, although patients themselves may see little change in the nominal co-payments they typically pay.Pfizer’s US investment of $70 billion will strengthen domestic manufacturing facilities, though the White House did not release details on the specific allocation of funds. The pharmaceutical giant produces several high-profile products, including the COVID-19 vaccine Comirnaty, the antiviral Paxlovid, cancer drugs, the blood thinner Eliquis, and the pneumonia vaccine Prevnar.Trump has pressed for lower drug prices for months, issuing an executive order in May giving companies 30 days to voluntarily reduce costs or face new government payment limits. In July, he sent letters to executives of 17 pharmaceutical companies urging price cuts, citing that US prices for brand-name drugs can be up to three times higher than in other nations.Health and Human Services Secretary Robert F. Kennedy Jr., present at the announcement, praised the deal. “Americans should not be gouged paying 300 or 400 or 1,000% more than people in other countries for the exact same drug,” he said. Trump has repeatedly argued that higher US drug prices subsidise care overseas.The announcement comes shortly before new US tariffs on branded drugs take effect on Wednesday. Companies that build US manufacturing plants or produce generic drugs are exempt from these tariffs.Pfizer’s direct-to-consumer initiatives, including websites for treatments such as Eliquis and Zepbound, have grown in popularity following the surge in virtual care during the pandemic, providing more accessibility for patients.
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