Jakarta – Nine major pharmaceutical companies ⁤have reached ⁣an agreement with the U.S. government to lower drug prices for both the Medicaid program and⁢ patients who pay ⁢cash. This move‍ represents ⁢the ⁣latest effort ⁣by President Donald Trump ⁤to address​ concerns about high drug costs in ⁣the⁤ United states.

following the announcement,shares of the involved pharmaceutical companies saw a ‍modest increase,rising between 1% and 3%. Investors appear⁤ to​ be responding favorably, interpreting the agreement as a way⁣ to eliminate ‍the threat‍ of potential tariffs imposed‍ by the Trump ‍administration⁤ for ‌the next three years.

Courtney Breen, ‍an analyst at Bernstein, stated that the agreement ​demonstrates pharmaceutical industry leaders proactively collaborating with the current administration ⁤while ⁣minimizing meaningful​ changes to their ‍financial performance. This ⁤agreement confirms⁤ that pharmaceutical industry leaders are capitalizing on ⁤the momentum to work ​with the current administration, while minimizing major changes to⁢ the ​company’s economics, ⁢Breen said.

Details of the Agreement

The core of the agreement ⁣involves each​ participating pharmaceutical company ​lowering the prices ⁤of most drugs sold to individuals enrolled ​in the low-income Medicaid program. Senior U.S. government officials ‌have promised significant savings on commonly used medications.

However, analysts⁢ caution ​that Medicaid only accounts for approximately 10% of​ total drug spending ⁣in​ the U.S. The U.S. ​healthcare system already ​benefits from significant ‌price discounts through various programs and negotiations.​ Thus, the overall impact⁢ on national drug⁢ spending might potentially be limited.

Participating Pharmaceutical Companies

The nine pharmaceutical⁢ companies involved in the ⁣agreement have ‍not⁤ been publicly named⁤ as of December ⁤20, 2025. ⁣Further details regarding the specific ⁣drugs subject to price reductions⁢ and the extent of those ‌reductions ⁢are also ‍pending release.

Medicaid and ‍U.S. Drug spending

Medicaid is a government-funded healthcare program⁤ providing coverage to low-income individuals ​and families.⁢ In 2023, Medicaid ⁢accounted for approximately ⁤$78.8 billion in prescription‌ drug spending, representing ⁣roughly⁣ 10% of ⁣the total $778.5 ⁢billion spent on prescription​ drugs in the U.S.Statista. The‍ majority of drug spending⁢ is driven ‍by⁤ private insurance (approximately⁤ 40%) and ‍Medicare‍ (approximately 35%).