President Donald Trump on Friday announced a new agreement with a major pharmaceutical manufacturer that will tie the company’s U.S. drug prices to the lowest rates offered in other developed countries, expanding the administration’s “most-favored-nation” policy for prescription drug costs.
The deal, unveiled during an Oval Office event with AstraZeneca Chief Executive Officer Pascal Soriot, follows a similar arrangement the administration announced in September with Pfizer. It marks the second major pharmaceutical pricing agreement under the White House’s executive order seeking to reduce medication costs for Medicaid and direct-to-consumer purchases.
Under the terms described by the White House, AstraZeneca will provide “most-favored-nation,” or MFN, pricing to all state Medicaid programs, meaning that U.S. patients will pay no more than the lowest price available for the same drugs in other developed countries. The administration said the agreement could save American taxpayers hundreds of millions of dollars annually.
“For many years, Americans have paid the highest prices anywhere in the world for prescription drugs,” Trump said. “Today, AstraZeneca is committing to offer all of their prescription medications to Medicaid at the most-favored-nation price—the lowest price anywhere in the world.”
The administration said the deal will benefit about 9 million patients currently taking AstraZeneca products. It will apply to a range of the company’s medications, including those used to treat asthma, chronic obstructive pulmonary disease (COPD), cardiovascular conditions, and cancer.
The agreement also includes a commitment from AstraZeneca to invest $50 billion in U.S. manufacturing and research and development by 2030. According to a White House fact sheet, the company will build a new pharmaceutical production facility in Charlottesville, Va., which is expected to create 3,600 jobs.
The new site will manufacture active pharmaceutical ingredients used in the company’s respiratory and oncology products.
The administration said the most significant price reductions will be seen in certain respiratory medicines. For example, the COPD treatment BEVESPI AEROSPHERE will reportedly be discounted by an average of 654 percent, while AIRSUPRA, an inhaler for asthma, will see a 96 percent price reduction for direct buyers. The company will also extend discounts to consumers who purchase drugs directly through a federal platform currently being developed by the Department of Health and Human Services.
Friday’s announcement comes just 10 days after Trump revealed a similar MFN agreement with Pfizer, which agreed to provide Medicaid with lower drug prices and participate in the new “TrumpRx” online platform.
That site will allow patients to buy medications directly from manufacturers at substantial discounts compared with retail pharmacy prices. Pfizer said at the time that many of its products, including vaccines, blood thinners, and cancer treatments, would be available at an average discount of 50 percent through the program.
The “most-favored-nation” pricing initiative is part of Trump’s broader effort to reduce the gap between U.S. and foreign prescription drug prices. The administration argues that American consumers have been subsidizing lower costs abroad because foreign governments use price controls and centralized purchasing to negotiate cheaper rates, while U.S. law restricts similar negotiations for federal programs like Medicare.
According to data cited by the White House, Americans pay more than three times as much as residents of other high-income countries for the same brand-name medications, even after accounting for rebates and insurance discounts. Officials said the new pricing model is intended to prevent pharmaceutical companies from charging higher prices domestically while offering lower prices internationally.
In addition to lowering drug costs, the administration said the AstraZeneca agreement will strengthen domestic supply chains and reduce reliance on overseas production. The White House said the Virginia facility would serve as a “strategic hub” for the production of advanced pharmaceutical ingredients used in chronic disease treatments.
The president framed the announcement as part of his ongoing effort to ensure that American patients “get the best deal anywhere in the world” on prescription drugs.
“This agreement will bring immediate relief to millions of Americans struggling with the cost of their medications,” Trump said. “It’s another step in putting American patients first.”
