AstraZeneca has reached an agreement with Donald Trump’s administration to lower prescription drug prices in exchange for tariff relief.
The British-based drugmaker will offer discounted prices for several medicines under Medicaid, the US health plan for low-income citizens. In return, the company will avoid steep tariffs threatened by Trump earlier this year.
“This is a most-favored-nation pricing model,” Trump said during an Oval Office announcement. “Americans have paid the highest drug prices in the world, but that’s going to change.”
AstraZeneca CEO Pascal Soriot, who joined Trump for the event, said negotiations were “tough” and had “kept me up at night.”
The deal follows a similar agreement with Pfizer last week, setting a framework for further talks with 17 other major pharmaceutical companies. It aims to match US prices to the lowest available in other developed countries.
Trump claimed the move could reduce some prices by “up to 1,000%,” a figure economists quickly dismissed as impossible.
In reality, the plan will slightly reduce costs for Medicaid, which already benefits from the lowest prices in the US. “It’s good for the companies, and has uncertain if any benefit for Americans struggling with drug costs,” said Rena Conti of Boston University.
AstraZeneca’s deal means it is unlikely to face the 100% tariffs Trump had threatened for companies that failed to lower prices.
“The tariffs were a big reason he came here,” Trump said.
Despite modest savings for consumers, the deal gives Trump a political victory on lowering drug costs — and offers AstraZeneca relief from potential economic penalties.
