The administration of U.S. President Donald Trump has signed most-favored-nation (MFN) drug pricing agreements with nine mid-sized pharmaceutical companies, in what analysts see as an expansion of Washington's drug price reduction policy beyond the largest drugmakers.
The White House reached MFN-based pricing agreements with Alcon, Astellas Pharma, BeOne Medicines, BridgeBio, CSL, Kyowa Kirin, Sun Pharma, Teva Pharmaceuticals and UCB, CNBC reported on the 31st of last month.
Under the MFN framework, drug prices in the United States are aligned with the lowest levels charged in other developed countries. The change is expected to lower prices for high-cost medicines used to treat hemophilia, Parkinson's disease, macular degeneration, glaucoma, liver disease, skin conditions and cancer.
The core of the measure is that state Medicaid programs across the United States will be able to apply MFN prices uniformly to drugs from these companies. The agreements bring the number of participating drugmakers to 26 from 17. Together, they account for roughly 89% of the U.S. branded drug market.
The Trump administration is not stopping at price cuts and is also pressing for expanded manufacturing capacity in the United States. The nine companies agreed to invest more than $19.6 billion (about 26.88 trillion won) in U.S. manufacturing facilities in the near term.
Stabilizing the supply chain for active pharmaceutical ingredients (APIs) is another key part of the agreements. UCB will donate 163 tons of levetiracetam, while Sun Pharma will contribute 71.4 tons of clindamycin and 6.75 tons of doxycycline to the U.S. Strategic Active Pharmaceutical Ingredients Reserve (SAPIR). Teva will provide 45 tons of metronidazole and 4.8 tons of amlodipine, and Astellas will supply 25 kilograms of tacrolimus. The aim is to reduce dependence on API supply chains concentrated in China and India and to secure the ability to procure medicines in an emergency.
The specific incentives the government is offering under the agreements were not disclosed. Industry officials are focusing on the possibility that U.S. tariff policy and the MFN agreements are effectively linked. Large drugmakers that signed earlier agreements also pledged both expanded U.S. production and lower drug prices. That has prompted speculation that securing access to the U.S. market and easing tariff burdens factored into the mid-sized companies' decision to join.
