Pfizer learns the art of the deal

The oft-criticized American drug system is trying another miracle cure: A new .gov.

In an announcement with the pharma giant Pfizer, the White House said it will unveil a direct-to-consumer website dubbed “TrumpRx” where patients can pay cash for discounted drugs.

What’s Pfizer’s role in all this? It will sell some drugs at a 50% average discount on that website. In more olive branches Pfizer’s throwing Trump’s way, the president said the company will also be lowering the prices of some of its medications in the US, and that it pledged an additional $70 billion investment in domestic manufacturing. In exchange, Pfizer said it won a three-year reprieve from Trump’s pharma tariffs.

Shares of Pfizer rose 6.83% today after the deal was announced. Other pharma leaders, including Merck, Bristol Myers Squibb, Amgen, GSK, and Sanofi, rose as investors surmised they could work out their own deals with the administration. BMO Capital Markets analyst Evan Seigerman wrote in a note the news is a tailwind for the pharma industry because it shows tariffs are avoidable.

A lot can change quickly

Last week, Trump announced via Truth Social that the US will slap a 100% tariff on any branded pharma products from companies that weren’t building plants in the US starting October 1. Today’s deal comes one day after a deadline Trump gave pharma companies in a July letter pushing them to lower drug prices to “most favored nation” pricing—which would link US prices to ones paid by peer countries abroad.

Direct to consumer is in, PBMs are out: Pfizer’s latest direct to consumer strategy mirrors a new trend we’ve been seeing across the healthcare industry, especially when it comes to GLP-1s: Skip the middlemen and sell patients the drugs directly.

Pharmacy benefit managers (PBMs) were intended to lower prices by negotiating between health insurers, employers, and drug manufacturers. However, critics argue they’re mucking up an already convoluted process that’s bloating prices. Right now, the three largest PBMs—CVS Caremark, Express Scripts, and OptumRx—control 80% of the market.

While TrumpRx and Pfizer’s pledge may lower prices on some drugs, it’s more of a band-aid than a panacea. Healthcare experts argue that legislation, not executive orders and tariff threats, would be more effective at lowering the high costs of prescription medication.—LB