Trump announces price reduction deal; Pfizer granted three-year exemption from drug tariffs, shares rise over 6% intraday.

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Before the Trump administration’s 100% ultra-high drug tariffs came into effect, American pharmaceutical giant Pfizer secured a three-year exemption from drug tariffs through an agreement to lower drug prices.

On Tuesday, September 30 Eastern Time, U.S. President Trump announced at the White House that his administration had reached an agreement with Pfizer: Pfizer would sell certain drugs at an average 50% discount on the newly established direct-to-consumer prescription drug website “TrumpRx”, and provide “Most Favored Nation” (MFN) pricing for those covered by national medical insurance plans; that is, drug companies cannot charge higher prices in the U.S. than their lowest price in any reference country.

Trump said that similar agreements were being negotiated with other pharmaceutical companies and warned, “If an agreement cannot be reached, we will impose tariffs on them.”

After Trump announced the deal, Pfizer’s stock price rose further during Tuesday's session, at one point expanding gains to over 6% at midday, reflecting investor approval for a deal that helps Pfizer avoid harsher pricing policies and tariff threats.

The agreement Pfizer reached is part of the Trump administration’s push to link U.S. drug prices to lower overseas prices.

According to CCTV news, last Thursday Trump announced on his social media that starting October 1, the U.S. would implement a new round of high tariffs on various imported products. This includes a 100% tariff on patented and branded drugs, putting pressure on the pharmaceutical industry. Pfizer CEO Albert Bourla stated that the tariff threat led to the agreement.

Core Contents of the Agreement: Price Cuts in Exchange for Tariff Exemption

Trump said at the White House on Tuesday: “Pfizer has agreed to provide some of the most popular existing drugs at substantial discounts, with discount rates ranging from 50% to even 100%.” These drugs will be sold directly to consumers through the government-run website TrumpRx.gov.

According to the agreement terms, Pfizer will offer its existing drugs at their lowest prices to patients participating in Medicaid — what Trump refers to as “Most Favored Nation” (MFN) pricing. Pfizer also promises to apply the same MFN pricing for new drugs covered by federal Medicare, federal Medicaid, and commercial insurance plans.

As part of the agreement, Pfizer has been granted a three-year grace period for drug tariffs. During this period, Pfizer’s products will not face pharmaceutical industry-specific tariffs, provided Pfizer further invests in U.S. manufacturing. Pfizer plans to rebuild drug production and R&D facilities in the United States.

Specific Drug Price Reduction Details

Pfizer stated it will offer most of its primary care treatment drugs and certain specialty brand drugs at an average discount of 50%, and up to 85%. According to media reports, these drugs address diseases affecting over 100 million patients, including migraines, rheumatoid arthritis, menopause, and atopic dermatitis.

Specific discounted drugs include: menopause treatment Duavee will be sold for $30, an 85% discount from the current price; the prescription ointment Eucrisa for mild-to-moderate eczema will cost patients only $162, down 80% from the current price; overactive bladder medication Tovias will be sold for $42, at an 85% discount from current prices.

However, some media pointed out that these drugs do not appear to be major sources of revenue for Pfizer. The company’s quarterly and annual financial reports only include concrete revenues for Xeljanz, which had global sales of $349 million in 2024, down 29% from 2023.

Diverging Views from Industry Experts and Wall Street

Evan Seigerman, an analyst at BMO Capital Markets, said in a research note that the agreement is positive for Pfizer stock and for the broader pharmaceutical industry as it “adds certainty and may steer presidential policy away from drug tariffs.”

Seigerman’s report said, “Today’s agreement seems to set a path for other pharmaceutical companies to follow, allowing for concession on pricing so that Trump can claim a 'victory,' without more strictly implementing the 'Most Favored Nation' policy or tariffs.”

However, health policy experts are skeptical about whether the agreement will bring substantial savings for Americans. Drew Altman, President and CEO of the nonpartisan health policy research institution KFF, said the agreement only applies to “one company and one project.”

Vanderbilt University health policy professor Stacie Dusetzina pointed out that direct-to-consumer sales “won’t really help ordinary people lower their costs,” as direct sales usually require patients to pay out of pocket instead of using insurance. Altman said, “Most Americans buy drugs through insurance plans, so this primarily helps the uninsured population.”

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