Johnson & Johnson announced Thursday it has reached an agreement with the Trump administration to reduce prescription drug prices for American patients in exchange for exemptions from pharmaceutical tariffs.
The agreement makes J&J the 15th major pharmaceutical company to strike such a deal with the administration, which has been pressuring drugmakers to align U.S. drug prices with those in other developed nations where costs are typically far lower.
Agreement Terms and Market Access
Under the deal, J&J will participate in the TrumpRx.gov direct-to-consumer platform, offering significantly discounted drug prices to cash-paying Americans. The company will also provide Medicaid programs access to medicines at prices comparable to those in other developed countries.
“The joint agreement meets the requests laid out by President Trump to the industry and provides the company’s pharmaceutical products an exemption from tariffs,” J&J stated.
Specific financial details, including revised pricing levels and which medicines are covered, were not disclosed in the announcement.
Part of Broader Administration Drug Pricing Initiative
The J&J agreement follows December deals with nine other major pharmaceutical manufacturers including Merck, Bristol Myers Squibb, Amgen, Gilead, GSK, Sanofi, Genentech, Boehringer Ingelheim, and Novartis.
Those December agreements delivered substantial price reductions on drugs treating chronic and costly conditions including:
- Type 2 diabetes
- Rheumatoid arthritis
- Multiple sclerosis
- Asthma and COPD
- Hepatitis B and C
- HIV
- Various cancers
All nine companies agreed to provide State Medicaid programs access to most-favored-nation pricing, expected to generate billions in savings for the program serving low-income Americans.
Earlier in the fall, the administration announced separate agreements with Eli Lilly, Novo Nordisk, Pfizer, AstraZeneca, and EMD Serono, bringing the total to 14 companies before J&J’s announcement.
Manufacturing Investment Commitments
As part of the agreement, J&J committed to building two new manufacturing facilities in North Carolina and Pennsylvania, supporting its previously announced $55 billion U.S. investment plan.
The company indicated additional U.S. manufacturing investments are likely later this year.
Since January 2025, pharmaceutical companies have pledged hundreds of billions of dollars in U.S. manufacturing commitments, driven partly by the administration’s tariff threats on branded drugs manufactured outside the United States.
Industry Context and Price Disparities
U.S. prescription drug prices average nearly three times higher than in other developed nations, according to a 2024 Rand Corporation study. Prices for branded drugs specifically run more than four times higher than international comparisons.
The administration’s most-favored-nation policy aims to eliminate what it characterizes as “global freeloading,” where foreign price controls result in American patients subsidizing lower costs abroad.
The policy has generated mixed industry reactions. While companies have moved to comply through pricing agreements and manufacturing commitments, industry association PhRMA has questioned whether most-favored-nation pricing represents the most effective approach to lowering drug costs, pointing instead to pharmacy benefit managers as a primary factor in price disparities.
What’s Next
The J&J agreement brings to 15 the number of major pharmaceutical manufacturers participating in the administration’s drug pricing initiative. Of the 17 companies originally targeted in July letters from President Trump, AbbVie and Regeneron have not yet announced deals.
The agreements provide participating companies three-year grace periods during which their products remain exempt from pharmaceutical-specific tariffs, provided they continue investing in U.S. manufacturing capacity.
Patients will be able to access discounted medications through TrumpRx.gov starting in January, though the platform’s full launch timeline and operational details have not been publicly disclosed.
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