Pfizer to Boost U.S. Drug Innovation, Slash Prices by Up to 85% in New Deal
Pfizer has inked a substantial pact with the U.S. government to foster American drug innovation and lower prices for patients. The deal encompasses significant investments in U.S. operations and substantial price cuts for numerous Pfizer drugs.
Pfizer has pledged to invest an additional $70 billion in the U.S. over the coming years, with over $83 billion already poured into U.S. research and development between 2018 and 2024. This agreement grants Pfizer a three-year reprieve from tariffs, encouraging further expansion of its U.S. manufacturing facilities.
Pfizer will slash prices for a broad range of its primary care treatments and some specialty products. The average cut is 50%, with some products seeing reductions of up to 85%. This deal is part of Pfizer's commitment to help Americans pay lower prices for prescription drugs and bolster U.S. leadership in biopharmaceutical innovation.
The agreement has had a positive impact on Pfizer's stock price. Shares surged around 6.8% following the announcement, thanks to anticipated regulatory clarity and a three-year suspension of new industry tariffs. Since Monday's market close, Pfizer's stock price has soared roughly 13%.
Pfizer will participate in a platform called 'TrumpRx', assisting patients in locating discount prescription drugs and connecting them to manufacturers' direct-to-consumer websites. However, Pfizer's price cuts seem to be confined only to Medicaid and the TrumpRx website for individuals without health insurance.
Pfizer's agreement with the U.S. government is anticipated to benefit both American patients and Pfizer investors. The deal includes substantial investments in the U.S., significant price cuts for many Pfizer drugs, and a positive impact on Pfizer's stock price. Nevertheless, the long-term effects on Pfizer's competitive position remain to be seen, as President Trump hinted at similar deals with other drugmakers.
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