AstraZeneca Is Said to Reach Drug-Price Deal With Trump

(Bloomberg) -- AstraZeneca Plc is expected to announce a deal with President Donald Trump to slash drug prices, people familiar with the plans said, making it the second pharmaceutical company to strike an agreement to advance one of the administration’s key health priorities.

While details about the pact weren’t immediately clear, the accord stems from a major push to lower drug prices in the US and ensure other wealthy countries shoulder a larger share of the cost of developing breakthrough new medicines.

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The deal is expected to be announced at the White House on Friday, said the people, who spoke on condition of anonymity because the plans aren’t yet public.

AstraZeneca and the White House declined to provide a comment.

Pfizer Inc. was first out of the gate in late September. It agreed to slash some drug prices by as much as 85% and sell them directly to the public in exchange for a three-year reprieve from the tariffs that Trump has threatened since the start of his second term.

A pact with the British pharmaceutical powerhouse advances the Trump administration’s efforts and may lure other companies to the negotiating table. AstraZeneca Chief Executive Officer Pascal Soriot broke ranks with his peers in the pharmaceutical industry in July, saying the US should pay similar prices for newly developed drugs as other wealthy countries.

Soriot was with Centers for Medicare & Medicaid Services Administrator Mehmet Oz on Thursday in Virginia, where the company is expanding its US manufacturing as part of its $50 billion investment in the US. Trump has called on drugmakers to make more of their medicines domestically, and the administration has launched an investigation into whether the lack of local production is a national security threat.

In September, Astra launched a new direct-to-consumer platform, where patients can get the diabetes drug Farxiga and the asthma inhaler Airsupra for as much as 70% off their list prices.

High Prices

Americans have traditionally paid the highest prices in the world for drugs. The structure positioned the US at the epicenter of a multibillion dollar market that generated scores of breakthrough medicines. It also allowed wealthy countries in Europe and elsewhere to draft off of American investment and reap the benefits without paying an equivalent share of the cost.

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The Trump administration has vowed to change the calculus through a concept known as most-favored nation pricing. It would require companies to offer their drugs in the US at prices that are equivalent or lower than those in other countries.

Investors initially feared that tariffs and rules around drug pricing would be a significant blow to the bottom line for pharmaceutical companies. In reality, some drugmakers increased prices abroad to reduce the discrepancy with the US and promised vague changes that are expected to have less of a financial impact.

MSNBC reported the agreement earlier on Friday.

(Adds additional background on drug pricing in sixth to 11th paragraphs.)

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