U.S. President Donald Trump has struck a drug pricing agreement with Regeneron Pharmaceuticals, the last of 17 major drug companies to sign agreements with the administration.
Pfizer, Eli Lilly, Amgen, and others have agreed to reduce the prices of their drugs for the government’s Medicaid program for the poor and for those who pay in cash in Trump’s quest to offer Americans prices more in line with those of other developed countries.
The pharmaceutical companies have agreed to offer “most-favoured nation” prices, to sell their medications directly to consumers on a new government website, TrumpRx.gov, and make billions of dollars in investments in the United States, in return for three-year exemptions from tariffs on imported drugs.
“I am very pleased to inform you that one of the most, I think, respected pharmaceutical companies, if not the most, I know it well, is Regeneron, and it is going to have its prescription drugs at very large discounts at most favored nation prices,” Trump said in the Oval Office. Regeneron shares were up 2.6%.
American patients currently pay the highest prices for prescription drugs – nearly triple the prices of other developed countries. Trump said Regeneron has agreed to lower the prices of its existing and future drugs for Medicaid patients at the Oval Office luncheon.
It also said it has been approved to use its gene therapy drug Otarmeni to treat a rare form of hearing loss in children. The treatment will be offered for free in the US, Trump said. The company will also drop the price of its cholesterol drug Praluent to $225 from $537 and put it on TrumpRx, he said.
The 17 drug makers represent 86% of the branded drug market in the U.S., Chris Klomp, chief counsel of the Department of Health and Human Services, who was involved in the talks, told reporters. But more than 90% of drugs consumed in the U.S. are generics, the U.S. Food and Drug Administration says.
Regeneron Agreement Overview
The new deal ensures that Regeneron will align its drug prices with the “most-favored-nation” (MFN) model—meaning U.S. prices will not exceed those in other developed countries.
Under the agreement, Regeneron will:
- Lower drug prices for Medicaid programs
- Offer medications through the government-backed platform TrumpRx
- Provide certain innovative therapies at no cost within the U.S.
This marks a significant shift in how Regeneron prices its therapies domestically.
Key Pricing Changes by Regeneron
The deal includes several impactful pricing adjustments from Regeneron:
- The cholesterol drug Praluent will see a sharp price reduction
- Medicaid patients will benefit from globally benchmarked pricing
- A newly approved gene therapy for rare hearing loss will be offered free in the U.S.
These steps highlight how Regeneron is balancing affordability with continued innovation.
Policy Framework Behind the Agreement
The pricing deal reflects a continued push toward international reference pricing, where U.S. drug costs are benchmarked against those in other developed nations. This approach has been debated for years, with proponents arguing it reduces excessive pricing, while critics warn it may limit innovation incentives.
The agreement also ties into broader healthcare reform efforts aimed at increasing transparency in pricing structures. By aligning costs with global standards, policymakers hope to create a more predictable and equitable system for patients and insurers alike.
Impact on Innovation and R&D Investment
One of the biggest concerns surrounding such agreements is their effect on pharmaceutical innovation. Lower drug prices can reduce profit margins, which companies traditionally reinvest into research and development.
However, the deal attempts to balance this by including commitments to domestic investment. Increased funding for U.S.-based research facilities and clinical trials may offset some of the financial pressure caused by pricing reforms. This could lead to a shift in how and where innovation is funded rather than a reduction in innovation itself.
