President Trump announced a price reduction agreement with a global pharmaceutical giant.

On [Date], President Trump announced a price reduction agreement with several global pharmaceutical giants (including Merck, Bristol-Myers Squibb, Novartis, Sanofi, Amgen, Gilead, Boehringer Ingelheim, and Genentech).

As a crucial step in the "Most Favored Nation Pricing" policy, these companies have agreed to lower Medicaid plan and cash-pay drug prices to levels consistent with other wealthy nations, and to offer substantial discounts through the TrumpRx platform. Simultaneously, the companies have committed to massive U.S. investments and supply chain donations in exchange for a three-year tariff exemption. This move signals an acceleration of the Trump administration's drug price reforms, which have now covered 14 top pharmaceutical companies, and is expected to significantly reduce the burden on American patients and promote global drug price rebalancing. Analysis of Impact on Market Sectors Overall U.S. Pharmaceutical Industry: The agreement strengthens government intervention in drug pricing. In the short term, pharmaceutical stock prices rose (most up 1%-3% on the announcement day) due to the avoidance of tariff threats and gained policy certainty. However, in the long term, it may compress profit margins, especially for companies with a high proportion of Medicaid business (e.g., Gilead). Pharmaceutical companies are shifting to a "defensive" positioning, accelerating domestic manufacturing investment (totaling over $150 billion), which benefits supply chain localization but may dampen incentives for the development of some high-priced innovative drugs. Industry merger and acquisition activity may further heat up to address "patent cliffs" and pricing pressures. As a crucial step in the "Most Favored Nation Pricing" policy, these companies have agreed to lower Medicaid plan and cash-pay drug prices to levels consistent with other wealthy nations, and to offer substantial discounts through the TrumpRx platform. Simultaneously, the companies have committed to massive U.S. investments and supply chain donations in exchange for a three-year tariff exemption. This move signals an acceleration of the Trump administration's drug price reforms, which have now covered 14 top pharmaceutical companies, and is expected to significantly reduce the burden on American patients and promote global drug price rebalancing. Analysis of Impact on Market Sectors Overall U.S. Pharmaceutical Industry: The agreement strengthens government intervention in drug pricing. In the short term, pharmaceutical stock prices rose (most up 1%-3% on the announcement day) due to the avoidance of tariff threats and gained policy certainty. However, in the long term, it may compress profit margins, especially for companies with a high proportion of Medicaid business (e.g., Gilead). Pharmaceutical companies are shifting to a "defensive" positioning, accelerating domestic manufacturing investment (totaling over $150 billion), which benefits supply chain localization but may dampen incentives for the development of some high-priced innovative drugs. Industry merger and acquisition activity may further heat up to address "patent cliffs" and pricing pressures.

Patient and Health Insurance System

Directly benefiting low-income groups and cash-paying patients, it is expected to save tens of billions of dollars, with significant reductions in specific drugs (such as those for diabetes, cancer, and respiratory conditions) (some exceeding %). After the platform is launched, it will bypass intermediaries and improve accessibility. However, the actual impact depends on the implementation details, as post-discount prices may still be higher than overseas, and not all drugs will be covered.

Global pharmaceutical market

Promoting the "end of foreign free-riding" may prompt countries like Europe to raise drug prices (an agreement has been reached with the UK to increase the net price of new drugs by %). The impact on emerging markets such as China is indirect: multinational pharmaceutical companies may raise prices or adopt bundled sales in new markets to compensate for losses in the U.S., potentially driving up the cost of local innovative drugs. However, it also stimulates opportunities for Chinese pharmaceutical companies to expand overseas (such as ), accelerating domestic innovation.

Related sectors (such as insurance, ): Trump hints at next step targeting insurers to lower premiums, putting pressure on the health insurance sector. The role of Pharmacy Benefit Managers (PBMs) may weaken due to the rise of direct sales platforms.

This agreement marks a milestone in Trump's drug pricing reform, delivering substantial benefits to American patients while challenging the profit models of pharmaceutical companies. Its impact is expected to gradually emerge starting this year, potentially reshaping the global drug pricing system.

The Trump administration plans to launch a website in the new year, where discounted prescription drugs will be available for consumers to purchase directly.