Donald Trump and Pharma Giants Announce Drug Pricing Deals to Lower Costs for Medicaid and Cash-Pay Patients
On December 19, 2025, Donald Trump and nine major pharmaceutical companies revealed agreements to reduce drug prices for Medicaid and cash-pay patients, with the goal of aligning U.S. medicine costs with those of other wealthy nations.
The participating firms include Bristol Myers Squibb, Gilead Sciences, Merck (and Roche’s Genentech), Novartis, Amgen, Boehringer Ingelheim, Sanofi, and GSK. Prior deals had been made by Pfizer, Eli Lilly, AstraZeneca, Novo Nordisk, and EMD Serono, while Regeneron, Johnson & Johnson, and AbbVie have not yet announced agreements.
These deals involve price cuts on the majority of Medicaid drugs, reduced direct-to-consumer prices for cash-pay customers, and launching medications at prices equal but not lower than those in other wealthy countries. The manufacturers also committed to increasing U.S. manufacturing capacity. Each deal includes a three-year exemption from tariffs for the involved companies.
Merck will offer its diabetes medications Januvia, Janumet, and Janumet XR to U.S. consumers at approximately 70% off list price. Pending approval, its cholesterol drug enlicitide will also be available through direct-to-consumer channels.
A portion of foreign sales revenue will be returned to the U.S. to help offset costs. The group collectively pledged to invest over $150 billion in U.S. research, development, and manufacturing, with Merck contributing about $70 billion alone.
These announcements come after a July 2025 initiative where the administration pushed for Most Favored Nation (MFN) pricing for new U.S. drug launches across commercial, government, and cash-pay markets, including Medicare.
Officials highlighted that Medicaid already secures deep discounts on many drugs and affirmed that the new framework will provide additional savings for Medicaid and cash-paying buyers.
