AstraZeneca PLC Sponsored ADR (AZN.US) reaches agreement with the Trump administration to lower drug prices in the United States in exchange for a three-year exemption from tariffs.

On October 10th local time, President Trump of the United States announced that his government had reached an agreement with Astrazeneca PLC Sponsored ADR (AZN.US), the latter will significantly reduce consumer prices for certain drugs in exchange for tariff concessions. Trump announced this news in the Oval Office of the White House on Friday, saying, "As the largest pharmaceutical company in the UK, Astrazeneca PLC Sponsored ADR has committed to providing significant discounts to American people in its vast prescription drug product catalog." It is worth mentioning that this is the second major agreement reached by the White House with a pharmaceutical company to reduce medical costs for the American people. Last week, American pharmaceutical giant Pfizer Inc. (PFE.US) also reached a similar agreement with the Trump administration, taking multiple measures to lower drug prices in the United States and gaining a three-year exemption from drug tariffs - on the condition that the company further increases its investment in domestic production in the United States. Pfizer Inc. plans to invest $70 billion in the United States for drug production and research and development facilities. Similar to the agreement reached by Pfizer Inc. with the Trump administration, Astrazeneca PLC Sponsored ADR will significantly lower drug prices in exchange for a three-year exemption from pharmaceutical industry tariffs. All new drug prices introduced by the company in the United States will be consistent with the lowest levels in comparable countries. In addition, the company will supply drugs to the Medicaid program for low-income and disabled individuals at significantly discounted prices. The British pharmaceutical company will also expand the products sold on its direct sales website "AstraZeneca Direct" at the prices that Trump described as "significantly reduced," and will provide these drugs on the TrumpRx website. Pascal Soriot, CEO of Astrazeneca PLC Sponsored ADR, stated that as part of the agreement, the company will be exempt from pharmaceutical industry tariffs. In July of this year, Astrazeneca PLC Sponsored ADR stated that it plans to invest $50 billion in the United States by 2030. The financial impact of this agreement is currently unclear. Due to the fact that most of the drugs sold by Astrazeneca PLC Sponsored ADR in the United States are produced locally, the threat of tariffs is relatively limited. In September of this year, Astrazeneca PLC Sponsored ADR launched a new direct sales platform where patients can purchase diabetes drug Farxiga and asthma inhaler Airsupra at a maximum discount of 30%. In addition, it is expected that the drugs to be reduced in price under this agreement include Airsupra, Farxiga, and the chronic obstructive pulmonary disease (COPD) drug Bevespi. Farxiga was the best-selling drug for Astrazeneca PLC Sponsored ADR last year with sales reaching $7.7 billion, but the price of this drug was originally planned to decrease after inclusion in the Medicaid drug pricing negotiation plan in 2026. Trump is working to push pharmaceutical companies to lower drug prices in the United States. This summer, Trump sent letters to the top 17 pharmaceutical companies worldwide listing several requirements, including: lowering drug prices for the low-income and disabled populations covered by Medicaid, directly selling discounted drugs to patients, and maintaining the same pricing level as other developed countries when launching new drugs in the United States. The agreements reached with Pfizer Inc. and Astrazeneca PLC Sponsored ADR will further advance the efforts of the Trump administration to lower drug prices and may attract other pharmaceutical companies to join the negotiations. Trump stated that his goal is to reach pricing agreements with other major pharmaceutical companies in the coming weeks. Trump also mentioned that pharmaceutical companies and other companies have invested as much as possible due to the threat of rising tariff costs. Initially, investors were concerned that tariffs and drug price regulations would significantly impact pharmaceutical company profits. However, as multiple agreements are rolled out, Wall Street is gradually realizing that the financial impact of these commitments on these pharmaceutical companies is much lower than initially expected.