President Trump is expected to announce another round of voluntary drug-pricing agreements today, this time involving Bayer, Takeda, CSL and several midsized biotechnology companies. The addition of Bayer (Germany), Takeda (Japan) and CSL (Australia) alongside mid-sized U.S. biotechs would extend the administration's initiative beyond the large American and European pharma companies that signed earlier deals.

Under the agreements, participating drugmakers are expected to extend "most-favored-nation" (MFN) pricing to outpatient drugs purchased through state Medicaid programs. The prices would be tied more closely to the lower amounts paid in other developed countries, including Canada, Germany, France, Japan and the United Kingdom. MFN pricing has been a central theme of Trump's drug-pricing policy since his first term, when a 2020 executive order sought to tie certain Medicare drug payments to the lowest prices paid among comparable developed countries; the current round of voluntary agreements shifts that approach toward negotiated deals with individual manufacturers rather than unilateral mandates.

In addition, some companies could make selected medicines available directly to cash-paying patients through TrumpRx, a channel that bypasses insurance companies and pharmacy-benefit managers. In exchange, participating manufacturers could receive protection from pharmaceutical tariffs and potentially other regulatory benefits. The tariff threat has been a key lever in the administration's negotiations: Trump has separately threatened tariffs on pharmaceutical imports unless companies shift more manufacturing to the United States.

The Trump administration has already concluded similar agreements with 17 major drugmakers, among them Pfizer, Eli Lilly, Merck, Amgen, Johnson & Johnson, Novo Nordisk and AstraZeneca. The administration estimates that the broader initiative could save federal and state Medicaid programs approximately $64.3 billion over 10 years. Medicaid, the joint federal-state program covering tens of millions of low-income Americans, has historically paid lower net prices than other payers because of statutory rebate requirements — one reason analysts see the incremental revenue impact of MFN Medicaid pricing as limited.

The immediate benefits of the new arrangement appear concentrated on Medicaid programs and on people purchasing selected medicines directly with cash. The announcement does not necessarily mean that Medicare beneficiaries or privately insured consumers will immediately see lower prices.

For the drug companies themselves, the near-term earnings impact is expected to be manageable. Medicaid accounts for only part of the U.S. market, and companies already provide rebates on their drugs to Medicaid recipients. Tariff relief would also help offset some of the reduced pricing (tariffs raise prices). The larger earnings risk would arise if MFN pricing were eventually expanded across Medicare and private insurance. Whether the administration attempts such an expansion — and whether it could withstand likely legal and industry challenges — is a key question for the initiative's next phase.

In other comments, Trump said:

• Warsh will do what he has to do; interest rates are too high
• Iran strikes will be limited
• Hormuz is in extremely good shape
• A lot of oil is coming out of Hormuz
• An average of 30 ships a night pass through Hormuz