Pfizer gets three-year reprieve from Trump pharma tariffs

Albert Bourla, chief executive officer of Pfizer Inc., during a Bloomberg Television interview in New York, US, on Tuesday, Oct. 31, 2023. Pfizer Inc.'s sales missed expectations for the quarter as its Covid-19 shot and pill continued to create instability for the drugmaker's efforts to transition out of the pandemic. Photographer: Jeenah Moon/Bloomberg

Pfizer Inc. Chief Executive Officer Albert Bourla said the company secured a three-year grace period from President Donald Trump’s promised tariffs on pharmaceuticals in a deal that would lower some of the company’s US drug prices.

Pfizer will sell some drugs at a 50% average discount on a direct-to-consumer website called TrumpRx, an initiative intended to allow Americans to pay for prescriptions at discounted rates negotiated by the government.

The deal appears to resolve two major threats facing Pfizer. It would stave off more damaging drug pricing policies while shielding the company from future tariffs imposed by the administration’s Section 232 investigation into whether the cost of medicine represents a national security threat.

It’s the latest example of the transactional nature of winning tariff exemptions from Trump, who has unilaterally wielded trade policy to exert power over multiple industries. As recently as last week, Trump threatened 100% tariffs on the pharma industry.

Pfizer shares rose as much as 5.6% after the tariff relief was announced, touching a session high. The stock had declined 10% this year through Monday’s close, trailing the S&P 500 Index’s 13% gain.

Similar deals could be forthcoming.

Commerce Secretary Howard Lutnick suggested the administration was holding the results of its national security probe into pharmaceutical imports that would pave the way for new tariffs, as officials engage in talks with major drugmakers.

“While we’re negotiating with these companies we’re going to let them play out and finish these negotiations,” Lutnick said.

Trump previously said that his administration would impose 100% duties on branded pharmaceuticals starting Wednesday unless a company was building US manufacturing plants. The latest comments from the president and his advisers indicate that threat was a negotiating ploy to get companies to lower prices on their products.

“They’re all coming in over the next week. We’re making deals with all of them. And I said if we don’t make a deal, then we’re going to tariff them an extra, 5, 6, 7, 8%. Whatever the difference is, we’ll take that away,” Trump said.

🚨HAPPENING TODAY AT THE WHITE HOUSE:

"The White House is planning to unveil a direct-to-consumer website for Americans to buy drugs, dubbed TrumpRx, as well as announce that Pfizer plans to lower prices on several of its medications in the U.S."https://t.co/0zz8FIg5By

— Karoline Leavitt (@PressSec) September 30, 2025

Pfizer said it will offer across-the-board reductions on US prices for Americans enrolled in the Medicaid insurance program, giving them “most favored nation” pricing on some of its medicines, Trump said. He has repeatedly pressured companies to bring their US prices in line with what foreign countries pay.

As part of this, Bourla also announced a $70 billion push on research and development and domestic manufacturing over the next few years. The company had been one of the rare exceptions among major drugmakers who rushed to highlight the return of manufacturing facilities to the US amid pressure from Trump.

“We now have the certainty and stability we need on two critical fronts, tariffs and pricing, that have suppressed the industry’s valuations to historic lows,” Bourla said in a statement.

Pfizer didn’t specify which of its medicines would be made available on TrumpRx but said the majority of its primary care drugs would be offered on the site. Pfizer’s top-selling drugs include the blood-thinner Eliquis, the pneumonia vaccine Prevnar, and a shot and pill for Covid.

Large corporations and powerful executives have been able to persuade the president to give them more favorable terms by leveraging their personal relationships with him. Last month, Apple Inc. secured relief from coming tariffs on imported semiconductors after Chief Executive Officer Tim Cook presented a gold and glass statue to Trump in the Oval Office and vowed to boost the companies’ investments in the US.

“While Democrats are threatening to shut down the government to subsidize health care for illegal aliens, President Trump is leveraging the power of the federal government to drastically cut drug prices for everyday Americans,” White House spokesman Kush Desai said in a statement. “Democrats talked the talk for decades about drug prices, but only President Trump is actually walking the walk.”

The most-favored-nation policy demands companies reduce Medicaid prices, increase the costs of their drugs overseas, promise to match foreign prices for future drugs to what they cost in the US and set up discounted direct-to-consumer sales for some widely used medications.

Trump outlined his demands in July with letters to 17 of the world’s largest drugmakers, including Eli Lilly & Co., Novo Nordisk A/S and Pfizer. Those letters gave the companies until Sept. 29 to comply, with the president vowing to “deploy every tool in our arsenal” to punish drug makers that didn’t follow through.

The pharmaceutical industry has protested the idea of globally-linked drug prices as a threat to years of US dominance in biomedical research. Drugmakers warn it will sap the incentive to invent new therapies and prevent patients from getting medicines they need. Executives have urged the administration to instead turn its attention to the middlemen in the pharmaceutical supply chain, who negotiate prices on behalf of employers.