Editor’s (re)View: Trump’s dangling of tariff relief brings Big Pharma to negotiating table

As the longest government shutdown in U.S. history dragged on this month, President Donald Trump didn’t skip a beat in his push to impose Most Favored Nation (MFN) drug pricing and onshoring of pharmaceutical manufacturing on Big Pharma, striking deals last week with Eli Lilly and Novo Nordisk for their wildly popular GLP-1 medications.

At a White House press conference announcing the deals, Trump said Lilly and Novo Nordisk are “joining the phenomenal list” of companies that “have agreed to drastically lower their prices for American patients,” including Pfizer, AstraZeneca, and EMD Serono. He noted that Lilly is investing $27 billion in U.S. manufacturing infrastructure, while Novo Nordisk plans to spend $10 billion to reshore domestic drug production. However, the investment levels don’t appear to sit well with the president.

“That’s all? That’s peanuts,” Trump exclaimed to Lilly CEO Dave Ricks and Novo Nordisk CEO Mike Doustdar, who were both at last week’s Oval Office event. Still, it was enough for the two drugmakers to secure three-year tariff exemptions, respectively, and access to beneficiaries for their GLP-1s who wouldn’t otherwise be covered for obesity indications.

Lilly and Novo Nordisk join a growing list of large pharmaceutical companies that have accepted Trump’s quid pro quo of MFN drug pricing and onshoring of U.S. pharmaceutical manufacturing in return for tariff exemptions. According to GlobalData analyst Cyrus Fan, the Trump administration’s “mix of incentives and tariffs is reshaping how pharma companies’ price, manufacture, and distribute medicines in the U.S.”     

On Sept. 30, Pfizer was the first Big Pharma company to announce an agreement to lower prescription drug prices, while securing a three-year grace period from the Department of Commerce’s Section 232 investigation on pharma tariffs and pledging a $70 billion investment in U.S. R&D and manufacturing.

On Oct. 10, AstraZeneca announced a similar deal with the Trump administration to lower the cost of U.S. prescription drugs, while also securing a three-year reprieve for its products from pharma tariffs under the Section 232 investigation. The drugmaker previously committed to investing $50 billion in U.S. manufacturing and R&D.

On Oct. 16, EMD Serono — the healthcare business of Merck KGaA — agreed with the administration to expand access to its portfolio of in vitro fertilization therapies in the U.S. At the time, the company said it entered into an agreement with the Commerce Department to “exclude its pharmaceutical products and ingredients from Section 232 tariffs, provided it invests in future biopharmaceutical manufacturing and research in the country.”

However, a month after the deal was announced, Merck KGaA is still in tariff talks with the White House. Danny Bar-Zohar, CEO of healthcare at Merck KGaA, told analysts during Thursday’s Q3 2025 earnings call that the company is in negotiations with the Trump administration “with a very good intent in order to relieve us from the pharmaceutical tariffs.” Bar-Zohar added that the aim “once we finalize this conversation, is to exclude a pharmaceutical product and ingredients from the Section 232 tariffs.”  

Edita Hamzic, healthcare analyst at GlobalData, remarked that such deals “mark a turning point where pharma growth is driven not only by science but also by geography and policy.” As Trump’s incentives and tariffs reshape operational decisions, Hamzic said contract development and manufacturing organizations (CDMOs) capable of offering “compliant, scalable, and technologically advanced manufacturing will become increasingly central to how global biopharma executes R&D and market access strategies in the U.S.”