As Pfizer and other pharma giants faced a Monday deadline under President Donald Trump's "most favored nation" (MFN) drug pricing campaign, the world is now getting some clarity on what the President's arm-twisting has accomplished.
Pfizer has agreed to provide all of its prescription drugs on Medicaid at reduced MFN prices, Trump said at a Tuesday press conference announcing the accord.
Additionally, Pfizer plans to soon offer many of its drugs at a "significant discount" through a new federally-operated direct-to-consumer (DTC) drug purchasing platform, TrumpRx.gov, the company said in a press release following the conference. Those DTC savings will range as high as 85% and come in at around 50% on average, the New York drugmaker explained.
Moving forward, Pfizer has committed to pricing any new medications in the U.S. at an MFN cost point aligned with prices in other key developed markets, and the company will also spend an additional $70 billion on onshore production and R&D "in the next few years." The company noted that it invested more than $83 billion in American biotech from 2018 through 2024.
The commitments have won Pfizer a three-year grace period, during which the company will be immune to the administration's Section 232 tariffs on pharmaceutical imports, which have landed at 100% for non-EU and Japanese companies that aren't actively building new production facilities in the U.S.
The Washington Post and The Wall Street Journal initially reported on several terms of the MFN agreement and Pfizer's investment earlier Tuesday morning, before the deal was officially announced.
After laying out MFN pricing ambitions in a May executive order, President Trump turned up the heat in July with a barrage of letters—sent to 17 of the world’s biggest drugmakers—outlining steps they needed to take to carry the policy through.
The MFN strategy essentially seeks to align the costs of U.S. prescription drugs with the lower prices offered in other developed nations.
The letters specifically called on the 17 drugmakers to offer MFN prices to “every single Medicaid patient” and pledge not to set “better prices” for drugs in other comparator countries than those offered in the United States.
At the time the letters were sent out, the president imposed a 60-day deadline, which passed on Monday, for the targeted companies to respond to the MFN call-to-action. If those companies failed to “step up” on the drug pricing issue, the White House threatened to “deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.”
The 17 drugmakers included in the communication were: AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, Merck KGaA’s EMD Serono, Roche’s Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron and Sanofi.
During the conference, Trump's federal health appointees—including HHS secretary Robert F. Kennedy Jr., Centers for Medicare & Medicaid Services (CMS) administrator Mehmet Oz, M.D., CMS deputy administrator and director of Medicare Chris Klomp and FDA commissioner Martin Makary, M.D.—stressed how hard-fought the Pfizer deal was, and teased many more drug pricing agreements to come.
“Albert Bourla looks very calm up here and cat-like, but he is ferocious when you get him in a negotiating room,” Oz said about Pfizer’s CEO, who stood with the administration during the conference. “This is true for all of the pharmaceutical companies that we are negotiating with.”
Regarding what the administration’s MFN framework actually looks like, Oz's right-hand man Klomp noted that “this is not made-up list prices that have often been quoted in prior administrations, stuffed with fees and rebates.”
“We start at net prices, after fees, after rebates—the prices people actually pay here,” he explained. “We then index to a basket of countries, wealthy countries across the world, and we go drug by drug, and we look for the lowest price, and that becomes the starting point for what an MFN price is in the United States.”
In a fact sheet issued midday Tuesday, the White House elaborated on a few of the discounts it secured with Pfizer, including an 80% price reduction for people purchasing the atopic dermatitis ointment Eucrisa directly, a 40% DTC discount for the immunology drug Xeljanz, and a 50% discount for Zavzpret, a migraine nasal spray approved by the FDA in 2023.
Further terms of the deal were not disclosed, but the discount examples in the White House fact sheet reflect smaller drugs in the grand scheme of Pfizer's sales.
“[T]his is not the only agreement; it’s the first,” Klomp said toward the end of the press event. OZ, for his part, teased "breaking news" on drug pricing agreements "for the rest of the fall."
Aside from price reductions, another major component of the Trump administration's MFN campaign is to encourage pharma companies to offer medicines directly to patients at discounted prices to bypass middlemen. Pharma companies have already been happy to oblige with this item of the agenda, with Novartis and Boehringer Ingelheim being the latest to roll out their offerings on Monday.
Also on Monday, the industry's top U.S. lobbying group, the Pharmaceutical Research and Manufacturers of America (PhRMA), touted $500 billion in planned U.S. infrastructure investments by its members over the next decade. The organization further plans to debut a new website, AmericasMedicines.com, to highlight the industry's direct purchasing options.
Editor's note: This story was updated at 1:30 pm ET on Sept. 30, 2025, with additional details from a White House press conference, fact sheet and a Pfizer press release.