Trump pharmaceutical tariff threats reduces after the Pfizer deal

With the CEO of Pfizer, Albert Bourla (L), US President Donald Trump shakes his hand when he announces a contract with Pfizer to reduce medication prices for medication in the Oval Office of the White House on September 30, 2025.

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President Donald Trump’s long -awaited threat of imposing pharmaceutical tariffs Pfizer.

Trump’s Tuesday agreement with the company through the voluntarily lower US medicinal products prices included a three-year liberation of pharmaceutical-specific tariffs, as long as the company invests in domestic production. On Tuesday, Pfizer committed to putting 70 billion US dollars into the US production and research in addition to previous investments.

This deal brought Pfizer and the broader pharmaceutical industry relief and clarity and signaled that many drugmakers could make similar agreements that they would immune to the taxes for most of Trump.

The Trump administration also made it clear that it will try to secure these drug price agreements before it imposes tariffs. Minister of Commerce Howard Lutnick said on Tuesday that he would end their negotiations with the administration before set by pharmaceutical-specific taxes within the framework of the legal authority known as § 232.

Trump said on Tuesday that he was working with other drug makers to secure similar types in the next week, and the White House confirmed that Eli Lilly the next drug price business is expected to complete. The vast majority of large pharmaceutical companies, including Eli Lilly, Johnson & JohnsonPresent AstrazenecaPresent AbbviePresent RochePresent Novo Nordisk And Amgen In the past few months, have introduced new US investments in production or research institutions in order to build a good will with the president.

Pfizer’s shares and several other drug manufacturers rose on Tuesday after the agreement. Pfizer’s share ended by more than 6%, while Eli Lilly rose by 5%. The shares of Abbvie and Astrazeneca rose by more than 3%, while the shares of J&J and Bristol Myers Squibb each increased more than 2%.

The Pfizer deal increases the certainty for drugmakers and changes the president’s guidelines “possibly away from pharmazöllen,” said Evan Seerkerman, analyst of BMO Capital Markets, in a note on Tuesday.

“Today’s deal seems to create a way for other pharmaceutical actors who enable the president with heading prices and a Trump victory without criminal implementation of the so-called politics or the customsized nations, added Seogerman.

In May, Trump signed an executive order that revived this controversial plan, which aims to connect the prices of some medicines to the significantly lower abroad in the United States. As part of these efforts, Trump sent 17 drug manufacturers – including Pfizer – letters in July to take measures until September 29 to reduce drug prices.

“If we generally think about the group, we would not be surprised to see a number of similar agreements that help to eliminate uncertainty about uncertainty [most-favored-nation policy and] Tariffs, “said JPMorgan analyst Chris Schott on Tuesday in a note.

The risk “most metered nation” can be manageable

The deal on Tuesday seemed to bring other good news to some drug manufacturers.

Pfizer agreed to sell his existing medication to Medicaid patients at the lowest price in other industrialized nations, or what Trump calls the most suitable price. Schott said, however, that the mostly added prices for Medicaid for Pfizer are “very manageable”. He said that this was partly due to the fact that Medicaid price design is already similar to the international level for most medication.

In particular, Medicaid accounts for less than 5% of the company’s US turnover and an “even lower percentage of global sales”, said the analyst of Leerink Partner, David Risinger, in a note on Tuesday.

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The same applies to many of the great drugmakers, according to the data compiled by Schott. Medicaid makes up less than 5% of Bristol Myers Squibb’s US turnover, less than 7% of the domestic sales of regenerone and around 8% of the domestic sales of Lilly and Abbvie.

Medicaid also represents around or less than 10% of US sales for all J&J, Merck, Amgen and Biogen.

Gilead One of the medication manufacturers with a greater exposure to Medicaid, the program constitutes around 20% of domestic sales. Medicaid plays a major role in the HIV prevention and treatment, especially in underserved populations, which is a central focus for Gilead.

The other part of Pfizer’s deal concerns the company, which guarantees the same panced nation prices for its new medicines for Medicare, Medicaid and commercial payers. But Schott said he saw a “limited influence” of this provision because he expects Pfizer and the broader industry to increase their prices for new drugs abroad instead of lowering them in the USA

He added that it will probably apply every year to a small number of treatments and is “much more digestive” for the company than any comprehensive implementation for products that are already on the market.