AstraZeneca has agreed to sell some of its medicines at discounted prices to the US Medicaid health plan in exchange for relief from Donald Trump’s proposed tariffs.
The British-based drugmaker follows Pfizer in signing a similar pact with the administration, which aims to lower prescription drug costs through a “most-favored-nation” pricing model.
Trump announced the deal from the Oval Office on Friday, declaring it a “historic step” to make medicines more affordable. AstraZeneca CEO Pascal Soriot, who joined Trump for the announcement, said the negotiations had “kept me up at night.”
Under the agreement, AstraZeneca will match the lowest prices it offers in other developed nations for drugs sold through Medicaid and for newly launched products. Trump claimed the deal could reduce drug prices to “the lowest anywhere in the world,” though experts quickly dismissed his exaggerated claim of cuts “up to 1,000%.”
Pfizer made a similar deal last week, agreeing to price reductions for Medicaid recipients in exchange for tariff exemptions. More than 70 million Americans rely on Medicaid, though analysts say the savings from AstraZeneca’s deal will likely be modest.
Economist Craig Garthwaite of Northwestern University noted, “AstraZeneca doesn’t have many drugs where this means a big discount for Medicaid.”
Trump has threatened 100% tariffs on drugmakers that refuse to lower prices or shift production to the US. “The tariffs were a big reason he came here,” Trump said of Soriot.
Experts, however, questioned whether the agreement would meaningfully reduce healthcare costs. Rena Conti of Boston University said, “It’s good for the companies, and has very uncertain if any benefit for Americans struggling with the affordability of prescription drugs.”
