Trump, RFK Jr., Pfizer announce first plan to slash prescription drug prices

Pharmaceutical giant Pfizer will sell its drugs at reduced, most-favored-nation (MFN) prices in the United States, with savings for patients as much as 85%.

Pfizer Chairman and CEO Albert Bourla, DVM, PhD, and President Donald J. Trump met at the White House to announce the deal on Sept. 30.

“This is — I can’t tell you how big this is,” the president said. “This is a really big announcement.”

“By working closely with the administration, we are lowering costs for patients and enabling greater investment in the U.S. biopharmaceutical ecosystem by ending the days when American families alone carried the global burden of paying for innovation,” Bourla said in Pfizer’s news release. “This is about putting all patients first and ensuring America remains the world’s leading engine of medical breakthroughs.”

Tariffs, prices and policy

The president noted some economic facts about pharmaceutical production and sales around the world. The United States has 4% of the world’s population and uses 13% of all prescription drugs. But Big Pharma makes 75% of its profits from the nation.

Bourla also noted two factors — tariffs and pricing — that have pushed the pharmaceutical industry’s valuations to historic lows. Pfizer will have a three-year grace period with no tariffs, as long as the company invests in U.S. drug manufacturing. Pfizer will spend an “unprecedented” $70 billion in U.S. research, development and capital projects. The company has 31,000 workers in 13 manufacturing and distribution sites and seven major research and development facilities.

“With this agreement in place, Pfizer can fully focus on delivering the next generation of cures, sharpening its focus in the areas where the company’s science, scale and agility can make the biggest difference for patients in areas like oncology, obesity, vaccines, and inflammation and immunology,” the company’s news release said.

Demanding lower prices

At the end of July, the president posted 17 letters addressed to Big Pharma leaders demanding lower prices in 60 days.

Two months later, Trump was flanked by his chief health advisers, including Health and Human Secretary Robert F. Kennedy, Jr.; Medicare and Medicaid Administrator Mehmet Oz, MD, MBA; and Food and Drug Administration (FDA) Commissioner Marty Makary, MD, MPH. Commerce Secretary Howard Lutnick and U.S. Trade Representative Jamieson Greer also were involved in the price talks, and in comments the leaders credited some of the negotiating team members by name.

The administration leaders emphasized unaffordable drug prices are a problem for Republicans and Democrats alike. They said Trump was insistent — even demanding — about getting most favored nation pricing on prescription medicines, and that Bourla was a fierce negotiator. There will be more to come from other drug companies, they said.

It’s about fairness

“Today is about fairness,” Kennedy said. “It's about equality. It's about giving hope to those who are trying to stay healthy, who are managing illness and are fighting for their lives. We refuse to make the most vulnerable citizens continue to pay an unthinkable price for the world's pharmaceutical breakthroughs, which we pay for this policy is a shield for the chronically ill who have carried the burden of high drug costs for far too long.

“It's a signal to every American family that we're finally putting their health and financial security first, and it sets a new standard, one that says we won't write blank checks to the drug industry any longer,” Kennedy said.

A great deal

Oz called it one of the greatest ever deals in the space of pharmaceuticals, with the day celebrated in medical fields for generations. Trump had a vision, but also needed tactics, and the first tactic was to bring Oz and Bourla together to develop trust.

Bourla recognized that the pharmaceutical industry knows Americans face a dangerous problem: choosing between paying for medicine or other costs of living, Oz said. Even so, talks took months and stalled, he said.

Trump’s order in July got the ball rolling again, and last week there was a breakthrough.

“We began to deal with the fundamental challenges we have, which is protecting medical advances for the future, while at the same time securing the prices Americans want today,” Oz said. “We're going to continue to stimulate and strengthen innovation. That's what a great country does.”

Five pillars of fairness

U.S. Centers for Medicare & Medicaid Services Deputy Administrator and Medicare Director Chris Klomp explained about most favored nation pricing. He

said the deal will have a foundation of fairness with five key pillars:

• Patients will have direct access to purchase needed drugs online through the new TrumpRX website. That bypasses middlemen and increases transparency.
• Pfizer will put virtually all of its portfolio of drugs at MFN prices available to Medicaid.
• Pfizer has committed, and other drug makers will commit, that they will not launch new medicines at prices higher than other wealthy countries. That is not a price cap or price control, but a principle that allows the United States to retrain other nations to appropriately value innovation for their citizens.
• The U.S. Department of Commerce and U.S. Trade Representative will encourage other countries to pay more for existing medications, with some of that money going to additional research and development.
• Pfizer is committing to move to the United States 100% of the value of its current imports.

Some sample savings

Klomp also displayed some posters with examples of before-and-after drug prices with reductions of up to 80%.

• Eucrisa, for dermatitis — 80% discount
• Duavee, for post-menopausal osteoporosis — 85% discount
• Zavzpret, for migraines — 50% discount
• Xeljance, for rheumatoid arthritis — 40% discount

There will be many more discounts on many more drugs, Klomp said.

“This is about access. This is about ensuring Americans have access to life saving medications,” he said. “These are real prices. These are net prices. They're not made up. They're not funny numbers.”

Shifting focus

In the news conference, Bourla said Americans will be the big winners of the deal. But American innovation and the American economy also will win. The deal also results in clarity about the framework for U.S. drug pricing, he said.

With the deal in place, Bourla said he will wants to spend time on better treatments for cancer, for obesity, and on better vaccines.

‘Financial rage’ over drug prices

As a physician, Makary described seeing patients “getting spun up into a financial rage,” using online fundraisers and asking their churches to take up collections to pay for medicines.

“Having cancer is hard enough,” he said. “Getting spun up into a financial rage in order to try to get the money to pay for treatment makes it so much harder.”

Up to 37% of people who go through cancer care say that financial toxicity makes them want to avoid or delay care in the future, Makary said.

That's how toxic financial toxicity can be,” he said. “And for what? For what? So the U.S. can finance the R and D of the world? Well, that ends today, thanks to President Trump.”

FDA also will work with drug companies moving their manufacturing to the United States, up to inspecting plants under construction so they are ready to produce on day one upon completion, Makary said.