Trump administration strikes deal with AbbVie to cut costs of certain drugs
A bottle of Allergan Plc Combigan eye medication is arranged for a photograph at a pharmacy in Princeton
(CNN) — The Trump administration has finalized a deal with drugmaker AbbVie to cut the cost of certain medicines, marking the latest pact as part of its “Most Favored Nation” pricing initiative.
The deal comes days after the administration inked a deal with Johnson & Johnson, which was announced by the drugmaker without the White House fanfare that accompanied the agreements unveiled with more than a dozen manufacturers last year.
Under the agreement, AbbVie said Monday it will offer a series of drugs to Medicaid as well as directly to consumers at “Most Favored Nation” levels, or the lowest price available in peer countries. It will sell some other medications at a deep discount compared to their list prices.
The drugs subject to “Most Favored Nation” pricing include glaucoma treatment Combigan and thyroid hormone medicine Synthroid. AbbVie is separately expected to reduce the price of its popular rheumatoid arthritis drug Humira, as well as another glaucoma medicine, Alphagan.
AbbVie declined to disclose the specifics of the discounts it plans to offer for the drugs.
Meanwhile, Johnson & Johnson said Thursday that it, too, would sell medicines directly to patients at “significantly discounted rates,” as well as provide drugs to Medicaid at prices comparable to those in other developed nations. The manufacturer also said it would enable American patients to access medicines at those prices but did not provide any details on the products that would be available or the size of the discounts.
The deals represent the latest in a string of administration pacts with major pharmaceutical companies aimed at lowering the price of drugs, as President Donald Trump tries to assuage voters’ concerns over the cost of living.
Trump has touted the “Most Favored Nation” initiative as a centerpiece of his health care agenda, vowing to push more companies to strike deals to sell their medicines directly to consumers willing to pay cash and forgo insurance at discounts through a soon-to-be-launched TrumpRx online platform.
Yet the size of the overall impact on Americans’ budgets remains unclear. The administration’s agreements cover only a small fraction of drugs sold in the US. And some of the discounted drugs may still be too costly for consumers who will need to pay for them out of pocket.
Plus, it’s unclear how much these agreements will benefit the Medicaid program, which already receives discounts on drugs.
Drugmakers, in the meantime, have sought to strike such deals in an effort to avoid hefty tariffs that Trump has threatened to impose on the industry by promising to expand manufacturing in the US, which has also been a top priority for the president.
In addition to the discounts on certain medicines, AbbVie is expected to commit to investing $100 billion in research and development and manufacturing over the next decade, the source said. The company will receive a three-year exemption from tariffs in exchange, a source with direct knowledge of the matter told CNN.
Johnson & Johnson, which previously announced $55 billion in investments in the US by early 2029, said it expects to announce additional commitments this year. It is also receiving a tariff reprieve. In its press release last week, the company highlighted two new domestic manufacturing facilities, including a cell therapy manufacturing site in Pennsylvania and a drug product manufacturing facility in North Carolina.
This story has been updated with additional information.
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