In a move that’s already sending ripples across the global pharmaceutical landscape, US President Donald Trump announced on October 10, 2025, a landmark agreement with AstraZeneca aimed at slashing prescription drug prices for millions of Americans. The British-Swedish pharmaceutical giant will now offer certain medicines to the US government's Medicaid health plan at discounts of up to 80%, following a similar arrangement struck with Pfizer just weeks prior. The deal, hailed by the White House as a model for future negotiations, is set to be facilitated through a new TrumpRx website launching next year, which will allow direct purchasing of these discounted drugs.
For Americans, especially the more than 70 million enrolled in Medicaid, the promise of lower drug prices can’t come soon enough. US patients currently pay nearly three times more for prescription medications than their counterparts in other developed nations, a fact that has long fueled public frustration and political debate. According to Reuters, President Trump has been pressuring pharmaceutical companies for months, even sending letters to 17 major drugmakers in July urging them to reduce their prices or face tariffs as steep as 100% on their products.
Under the terms of the new agreement, AstraZeneca will receive a three-year exemption from these threatened tariffs, giving the company breathing room to "localize the remainder of our products," as CEO Pascal Soriot put it during an Oval Office event announcing the deal. Soriot emphasized the company’s commitment to US patients, stating, "Every year AstraZeneca treats millions of Americans living with cancer and chronic diseases and, as a result of today's agreement, many patients will access life-changing medicines at lower prices. This new approach also helps safeguard America's pioneering role as a global powerhouse in innovation and developing the next generation of medicines. It is now essential other wealthy countries step up their contribution to fund innovation."
Mehmet Oz, the Trump-appointed leader of the Centers for Medicare and Medicaid Services, added that AstraZeneca would provide "massively" discounted drugs for lung disease, a move expected to benefit some of the country’s most vulnerable patients. The TrumpRx website, set to launch in 2026, will serve as the gateway for Medicaid beneficiaries to access these reduced-price medicines.
This agreement, however, is not happening in a vacuum. It comes as part of a broader White House strategy to force pharmaceutical companies to match international prices or risk punitive tariffs, a tactic that has already upended global drug pricing dynamics. According to the Daily Mail, Trump’s hardline approach has sparked what some are calling a global drugs price war, with consequences reverberating far beyond American shores.
In the United Kingdom, the National Health Service (NHS) is bracing for a potential £20 billion yearly increase in its drug bill as ministers negotiate to raise NHS England's "value for money" spending threshold by 25%. This move, intended to stave off threats from both the US and the pharmaceutical industry, could make it easier for NHS patients to access more expensive drugs, but at a significant cost to the public purse. The UK government has admitted that higher prices will be "necessary" to keep pharmaceutical investments from fleeing the country, a concern echoed by AstraZeneca executives who have warned of reduced investment unless a settlement is reached.
The effects are already being felt in the UK market. The manufacturer of the weight-loss drug Mounjaro, for example, announced in August it would more than double the wholesale price of the jab in Britain, with the cost for private users soaring to £4,000 per year. The highest dose of the drug, a 15mg KwikPen, has seen its list price jump from £122 to £330, a staggering 170% increase since September 1, according to company figures cited by the Daily Mail. Even the lowest dose has risen by 45% in the same period.
For the NHS, these developments are raising difficult questions. The National Institute for Health and Care Excellence (NICE), which evaluates medicines based on quality-adjusted life years (QALYs), may soon have to consider drugs costing between £20,000 and £30,000 per additional QALY gained as "good value for money." But increasing the threshold will mean that the health service—and, by extension, taxpayers—will end up paying more for medicines overall.
Meanwhile, in the US, the impact of the AstraZeneca deal on Medicaid spending may be limited. As Craig Garthwaite, a professor at Northwestern University's Kellogg School of Management, told Reuters, "If you look at AstraZeneca's portfolio, I don't think there are a bunch of drugs that exist where that's going to involve them giving a very big discount to Medicaid." Rena Conti, an associate professor at Boston University, echoed this sentiment, saying the deal may protect AstraZeneca from tariffs but is unlikely to make any real difference to rising health insurance premiums or out-of-pocket drug costs in the US.
Despite these caveats, the Trump administration remains bullish on its approach. After negotiations with the pharmaceutical industry stalled earlier this year, the White House ramped up pressure by threatening tariffs of up to 100%, a move that ultimately brought both Pfizer and AstraZeneca to the table. The September 30 agreement with Pfizer, which also included a three-year tariff exemption, was followed by a surge in the company’s shares, suggesting that Wall Street does not see the deals as a major drag on profits. As Sel Hardy, an analyst at CFRA Research, put it, "From a company perspective, you have more visibility going forward. They know they'll not be facing tariffs for three years."
Still, the broader impact of Trump’s drug pricing offensive remains uncertain. Part of the answer will come in November, when pricing negotiations begin on 15 leading drugs under legislation signed by former president Joe Biden in 2022. For now, the deals with Pfizer and AstraZeneca are being watched closely by other pharmaceutical companies and governments alike, all of whom are weighing the risks and rewards of a new era in global drug pricing.
As the political and economic chess game unfolds, one thing is clear: the battle over drug prices is far from over, and its outcome will shape the future of healthcare for millions on both sides of the Atlantic.
