Trump, the price of the medication Pfizer deals with the details, the possible impact

Diving brief:

• Pfizer signed an agreement with the Trump administration on Tuesday to offer prices for “most favored” medication for each Medicaid state program and has reduced prices directly to other consumers via a new website.
• The agreement also delays, by three years, any price on PFIZER drugs which could result from the current probe “Section 232” on the effects of pharmaceutical imports on national security. Pfizer, who had not yet joined his peers to make major American production promises, has also promised to spend $ 70 billion in “research, development and fixed assets” in the coming years.
• The specific terms of the agreement remain “confidential,” said Pfizer. But it was announced one day after the expiration of a deadline for major drug manufacturers to respond to President Trump’s call to align American prices with those abroad. The agreement also followed a wave of recent measures by drug manufacturers, as well as the lobbying group of the PHRMA industry, to sell drugs at lower costs by bypassing insurers and pharmacy services managers.

Diving insight:

The real impact of Tuesday’s agreement on the prices paid by American consumers can be limited. Since 1990, Medicaid, which has offered coverage for millions of Americans, has reduced prices thanks to a compulsory medication delivery program which gives it a 23% discount on the average price paid by wholesalers and other major buyers.

In addition, most people in the United States access drugs through business health plans or supported by the government. This could reduce the probable scope of these new direct programs to consumers to people without insurance or who are willing to pay from the pocket – as in a situation where insurance co -pays are higher than the case price of a drug.

However, in part because of the pressure from the Trump administration, several drug manufacturers have set up ways to get around insurers and sell medicines at reduced prices for consumers. Among them, the obesity of Eli Lilly shot Zepbound, which begins at $ 399 per month, and Bristol Myers Squibb and the Mifizer Eliques, which costs $ 346 per month.

Some of the drugs offered through these programs will not have an exclusivity of the market for a long time, however, which means that cheaper generic alternatives could soon be available. Elimisis loses the protection of patents in 2026, while Xeljanz, a drug with rheumatoid arthritis, the White House praised as part of the new Pfizer program, is also patent next year.

In addition, cancer drugs and rare diseases that can cost dozens, even hundreds of thousands of dollars a year, have not yet been involved in direct channels to consumers. These drugs are often prescribed by specialists, issued through special and administered pharmacies in health environments, complicating their potential inclusion.

Carter Gould, analyst of the investment company Cantor Fitzgerald, maintains that the Pfizer agreement “seems largely benign” and is “more optics than bite”.

“For all the media threshing and comments concerning the provision of a transformative victory for the drop in drug prices, it should be noted that Pfizer’s public relations have not changed a single financial metric or an orientation,” Bould wrote in a note to customers.

In his declaration, the pharmaceutical giant said that he was engaged in a “balanced global pricing approach which continues to recognize the value of innovation while ensuring that prices in the United States and other developed countries are both reasonable and sustainable”, but has not declared how closely these prices would be.

The White House said Pfizer had agreed to “repatriate” in the United States, any increased income he sees in relation to higher prices elsewhere.