Trump’s pharma tariff threat brings AstraZeneca to heel with drug pricing agreement

Cambridge, U.K.-based drugmaker AstraZeneca on Friday announced an agreement with the Trump administration to lower the cost of U.S. prescription drugs, while securing for the company a three-year reprieve for its products from pharmaceutical tariffs under a Department of Commerce Section 232 investigation.

AstraZeneca CEO Pascal Soriot in his remarks at the White House said Trump’s vision “secures America’s top position in life sciences and the onshoring of critical innovations and manufacturing,” while noting that the deal includes a three-year grace period for AstraZeneca’s products from 232 investigation tariffs.

“I’m not sure that Pascal would like to say, but behind the scenes he did say tariffs were a big reason he came here,” said President Donald Trump during Friday’s press conference.   

On the topic of tariffs, Soriot thanked Commerce Secretary Howard Lutnick for granting AstraZeneca a “three-year tariff exemption to localize the remainder of our products,” adding that most of AstraZeneca’s products “are locally manufactured but we need to transfer the remaining part to this country.”

In a post on Truth Social late last month, Trump warned that drug companies who are not building their pharmaceutical manufacturing plants in the U.S. will be hit with a 100% tariff. On Thursday, AstraZeneca broke ground on a new $4.5 billion active pharmaceutical ingredient (API) manufacturing facility, near Charlottesville, Virginia, which will be focused on chronic diseases. The investment is part of AstraZeneca’s pledge made in July to invest $50 billion in manufacturing and R&D in the U.S. by 2030.

“For all the pharmaceutical companies out there, we’re talking to all of you. Pick up a shovel, this is a great place to build a facility as AstraZeneca has shown us,” Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, said at Friday’s White House event announcing the drug pricing agreement.

AstraZeneca is the second major Big Pharma company to negotiate a drug pricing deal with the Trump administration. On Sept. 30, Pfizer announced an agreement to lower U.S. drug prices, locking in a three-year grace period from pharma-specific tariffs.

At the time, Pfizer CEO Albert Bourla acknowledged in a White House event that tariffs are the “most powerful tool to motivate behaviors, Mr. President, and clearly motivated ours.” Trump has been using the threat of pharma tariffs as leverage for his “most favored nation” drug pricing policy.

Health and Human Services Secretary Robert F. Kennedy Jr. at Friday’s White House event said that thanks to the threat of tariffs, the Trump administration “had extraordinary leverage to craft these deals” with AstraZeneca and Pfizer.