U.S. President Donald Trump shakes hands with Pfizer CEO Albert Bourla (L) as he announces a deal with Pfizer to lower Medicaid drug prices in the Oval Office of the White House on September 30, 2025 in Washington, DC. <\/p>\n
Win Mcnamee | Getty Images<\/p>\n
President Donald Trump<\/a>‘s long-awaited threat to impose pharmaceutical tariffs<\/a> may not pose as much of a challenge as drugmakers once feared<\/a>, following his new drug-pricing deal<\/a> with Pfizer<\/a>.<\/p>\n Trump’s Tuesday agreement with the company to voluntarily lower U.S. drug prices included a three-year exemption from pharmaceutical-specific tariffs, as long as the firm further invests in domestic manufacturing. Pfizer on Tuesday pledged to put $70 billion into U.S. manufacturing and research, on top of previous investments.<\/p>\n That deal brought relief and clarity to Pfizer and the broader pharmaceutical industry, signaling that many drugmakers could strike similar deals that would make them immune to the levies for most of Trump’s term.\u00a0<\/p>\n The Trump administration also made it clear that it will try to secure those drug-pricing agreements before it imposes tariffs. Commerce Secretary Howard Lutnick on Tuesday said he will let companies finish their negotiations with the administration before setting pharmaceutical-specific levies under the legal authority known as Section 232.\u00a0<\/p>\n Trump on Tuesday said he’s working with other drugmakers to secure similar pacts over the next week, and the White House confirmed that Eli Lilly<\/a> is expected to strike the next drug-pricing deal. The vast majority of major pharmaceutical companies, including Eli Lilly, Johnson & Johnson<\/a>, AstraZeneca<\/a>, AbbVie<\/a>, Roche<\/a>, Novo Nordisk<\/a>, and Amgen<\/a> have unveiled new U.S. investments in manufacturing or research facilities in recent months to build goodwill with the president.<\/p>\n Shares of Pfizer and several other drugmakers rose on Tuesday following the agreement. Eli Lilly’s stock ended 5% higher and shares of AbbVie and AstraZeneca climbed more than 3%, while J&J and Bristol Myers Squibb’s stocks increased more than 2% each.<\/p>\n The Pfizer deal adds certainty for drugmakers and shifts the president’s policies “potentially away from Pharma tariffs,” BMO Capital Markets analyst Evan Seigerman said in a note on Tuesday.\u00a0<\/p>\n “Today’s deal seems to set a path for other pharmaceutical players to follow, allowing for headline pricing concessions and a Trump ‘win’ without more punitive implementation” of the president’s so-called most favored nation policy or tariffs, Seigerman added.\u00a0<\/p>\n Trump in May signed an executive order reviving that controversial plan, which aims to tie<\/a> the prices of some medicines in the U.S. to the significantly lower ones abroad. As part of that effort, Trump in July sent letters<\/a> to 17 drugmakers \u2014 including Pfizer \u2014 calling on them to take steps to lower drug prices by Sept. 29.\u00a0<\/p>\n “As we think about the group more broadly, we would not be surprised to see a number of similar agreements to help remove uncertainty on the [most favored nation policy and] tariffs,” JPMorgan analyst Chris Schott said in a note on Tuesday.\u00a0<\/p>\n