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The White House on Friday announced it has struck a deal with AstraZeneca after the drugmaker agreed to lower prices and sell medications to Medicaid at “most favored nation” prices.
The administration is also launching a new website in 2026, TrumpRx.gov, through which AstraZeneca will offer drugs to consumers at discounted rates.
The most favored nation drug pricing policy arose out of an executive order, signed by President Donald Trump in May, that effectively links drug prices in the U.S. to the cost of drugs abroad.
The executive order directs the U.S. Trade Representative and Secretary of Commerce to take action to ensure foreign countries are not engaged in practices that purposefully and unfairly undercut market prices and drive price hikes in the U.S., though it's unclear from the order what action would be taken.
It also instructs the administration to communicate price targets to pharmaceutical manufacturers. If drug manufacturers fail to offer most-favored-nation pricing, the order directs HHS to propose rules that impose this pricing, as well as take "other aggressive measures.”
WHAT'S THE IMPACT
The new agreement with AstraZeneca will provide every state Medicaid program in the country with access to MFN drug prices on AstraZeneca products, according to the White House, and guarantees MFN pricing for all new medicines the company brings to market.
It also tasks AstraZeneca with taking increased foreign revenue on existing products and reinvesting it in the U.S.
AstraZeneca will be required to offer medicines at a deep discount off the list price when selling directly to American patients, the White House said.
AstraZeneca is also announcing that it will invest $50 billion in U.S. manufacturing and research and development by 2030. The company is building a new facility in Charlottesville, Virginia, which will produce advanced pharmaceutical ingredients to support its chronic disease and oncology pipelines, and is expected to create about 3,600 jobs, the drugmaker said.
The White House said that roughly 9 million patients are treated with AstraZeneca medicines and will stand to benefit from the negotiations.
Bevespi Aerosphere, an inhaler used to treat COPD, will be made available to patients purchasing directly at a discount equal to 654% of the deal price, the administration said. Another COPD inhaler, Breztri Aerosphere, will see a discount equal to 98% of the deal price. Airsupra, an asthma inhaler, will see a discount equal to 96% of the deal price.
THE LARGER TREND
The administration struck a similar deal with Pfizer earlier this month.
Trump's MFN executive order drew criticism from industry organizations when it was announced. Patients for Affordable Drugs Now Executive Director Merith Basey said that while her organization agrees that Americans shouldn't be paying the highest drug prices in the world – and broadly supports international reference pricing, including "most favored nation"-style policies – the executive order lacks the necessary guardrails.
"It leaves room for pharmaceutical companies to continue gaming the system at the expense of patients," said Basey. "The reality is: Drug companies set high prices in the U.S. because U.S. policy lets them – unlike other high-income countries that negotiate lower prices."
Several aspects of the order raise implementation questions, she said, including what "aggressive" actions may follow if manufacturers don't voluntarily comply with the pricing targets.
The order also offers limited details about how HHS would enforce these targets, she said, or what mechanisms it would use to encourage compliance. And while it outlines a direct-to-consumer model at most favored nation prices, it does not provide information on how such a system would operate, whether it would be integrated with public or private insurance, or how HHS would establish and oversee it.
PhRMA was in favor of the executive order, saying the administration is right to use trade negotiations "to force foreign governments to pay their fair share for medicines."
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.