Trump Announces Historic Pfizer Deal: 50% Discount on Medications Through TrumpRx Platform

US President Donald Trump announced on Tuesday a landmark deal with Pfizer to lower prescription drug costs for Medicaid recipients, declaring this agreement would be the first of many with pharmaceutical companies under potential tariff threats.

The announcement came during a White House event alongside Pfizer CEO Albert Bourla, occurring just hours before a possible government shutdown amid partisan disagreements over healthcare spending.

Pfizer Inc., one of America's pharmaceutical giants, manufactures the COVID-19 vaccine Comirnaty and treatment Paxlovid, along with numerous cancer medications, blood thinner Eliquis, and Prevnar pneumonia vaccines.

The agreement requires New York-based Pfizer to implement most-favored-nation pricing for Medicaid, guaranteeing the lowest prices offered in other developed countries will be matched for both existing and newly launched medications.

Additionally, Pfizer committed to participating in the administration's planned TrumpRx website, which will enable consumers to purchase medications directly from manufacturers. The company stated many of its products will be available at discounts averaging 50% through this platform.

This deal builds upon Trump's May executive order that established deadlines for pharmaceutical companies to voluntarily reduce prices or face government payment restrictions. Trump indicated similar arrangements with other drugmakers would be announced within the week.

"I can't tell you how big this is," President Trump emphasized during the announcement.

Bourla added, "We are turning the tide and we are reversing an unfair situation."

However, prescription drug pricing expert Stacie Dusetzina from Vanderbilt University Medical Center questioned the practical impact, noting that Pfizer has kept specific terms confidential, making it unclear how different the new pricing would be from current Medicaid rates.

According to senior administration officials speaking anonymously, consumers shouldn't expect to see lower prices from this deal until 2026.

Medicaid patients typically pay minimal prescription co-payments of just a few dollars, but the reduced prices could significantly benefit state budgets that fund these programs.

The price reductions would also help uninsured patients who lack negotiating leverage. However, even with 50% discounts through the administration's website, some medications might still cost patients hundreds of dollars monthly.

Some pharmaceutical companies have recently launched direct-to-consumer websites for specific products like obesity treatments or blood thinners, but Dusetzina cautioned that selling medications directly to consumers would benefit relatively few people.

"Theoretically there are some who will benefit, but in general this is not a solution for lowering drug prices," she explained.

Beyond cost reductions, Trump announced Pfizer's commitment to invest $70 billion in domestic manufacturing facilities, joining other major drugmakers who have recently announced plans to expand production in the United States.

While specific investment details weren't immediately released by the White House, Pfizer confirmed in a statement that this funding would support US research, development, and capital projects over the coming years.

Trump has consistently emphasized the need to lower medication costs and increase domestic pharmaceutical production. He acknowledged using tariff threats—a favored negotiation tactic—to secure these deals, though such measures could potentially increase drug prices.

Trump claimed the tariff threat provided "a pretty good negotiating position" and stated, "This is something that most people said was not doable."

The president's repeated assertion that the deal would reduce drug prices by more than 100%—"14, 15, 1,600% reductions in some cases"—is mathematically impossible, as a 100% reduction would make medications free.

In late July, Trump sent letters to executives at 17 pharmaceutical companies outlining desired changes. These communications, shared on social media, highlighted that US prices for brand-name drugs can be up to three times higher than international averages.

The letters requested commitments by Monday for drugmakers to offer most-favored-nation pricing to Medicaid for existing and new medications, as Pfizer has now agreed to do.

Trump also asked pharmaceutical companies to extend these lower pricing structures to direct sales to consumers and businesses, frequently claiming that higher US drug prices effectively subsidize healthcare in other countries.

Drug costs for American patients depend on multiple factors, including market competition and insurance coverage. Most Americans have health coverage through employers, individual insurance markets, or government programs like Medicaid and Medicare, which shield them from full medication costs.

While Trump focused on medication affordability Tuesday, Democrats concentrated on reversing Medicaid cuts implemented in legislation he signed this summer.

Democratic lawmakers pushed to include these reversals in a short-term government funding measure, along with extending tax cuts that make Affordable Care Act marketplace insurance premiums more accessible.

Republicans have stated they are unwilling to negotiate these terms.