President Donald Trump announced a new agreement with AstraZeneca, a British pharmaceutical company, aimed at reducing prescription drug prices for Medicaid patients. This deal, revealed on Friday, is part of the administration’s broader effort to tackle high medication costs in the U.S. AstraZeneca joins Pfizer as one of the first companies to reach such an agreement with the White House.
Under the terms of the deal, AstraZeneca will offer certain medications at a discount to Medicaid, the government health program for low-income individuals, in exchange for tariff relief. The company’s CEO, Pascal Soriot, stated that some drugs could be available at discounts of up to 80% through a new website called TrumpRx, which is set to launch next year. Additionally, AstraZeneca will receive a three-year exemption from tariffs to help localize its production in the U.S.
Currently, Americans pay significantly more for prescription drugs compared to other developed countries. Trump has been pressuring drugmakers to lower their prices or face hefty tariffs. Recently, he threatened to impose 100% tariffs after previous negotiations with the pharmaceutical industry faltered.
Medicaid serves over 70 million Americans, but its drug spending is much less than Medicare, which spent $216 billion on medications in 2021 compared to Medicaid’s $80 billion. Experts like Craig Garthwaite from Northwestern University have pointed out that Medicaid already has the lowest drug prices in the country, so the additional savings from this deal may not be substantial.
Rena Conti, an associate professor at Boston University, echoed this sentiment, suggesting that while the agreement may benefit AstraZeneca, it might not significantly help Americans struggling with high drug costs.
AstraZeneca is also committed to expanding its U.S. operations, announcing a $50 billion investment in manufacturing and research by 2030. This includes plans to build its largest facility in Virginia and expand in five other states. The company is also selling its diabetes and asthma medications directly to U.S. patients at discounts of up to 70%, further responding to the pressure from the Trump administration.
As AstraZeneca positions itself as a key player in the U.S. market, Soriot emphasizes the company’s commitment to American operations, even planning to list its shares in the U.S. in addition to its current markets in the U.K. and Europe.
