AstraZeneca Cuts Discounted Drug Pricing Deal With the White House. The Stock Is Rising.

AstraZeneca has cut a pricing deal with the White House. (Anthony Devlin/Getty Images for AstraZeneca)

AstraZeneca on Friday became the second big drugmaker after Pfizer to cut a pricing deal with the White House, announcing an agreement alongside President Donald Trump at a late afternoon press conference.

AstraZeneca stock was up 1.6% in Friday after-hours trading.

The deal hews closely to the template set by the agreement Trump announced with Pfizer late last month. AstraZeneca, which is headquartered in the United Kingdom but earned 43% of its revenues in the U.S. in 2024, committed to offer all of its prescription medications to Medicaid at “most favored nation prices”, which means “the lowest price anywhere in the world,” said Trump.

Drug prices could go down as much as 1,000% in some cases, said Trump, noting the move would “save American taxpayers hundreds of millions of dollars each year.”

AstraZeneca will also list many of its drugs online through TrumpRx.com, a new federal website that will sell drugs for cash straight to consumers at lower prices.

On top of price cuts, AstraZeneca will invest $50 billion in the United States over the next five years for research and development of new drugs. In exchange, AstraZeneca will get a three-year exemption from Trump’s tariffs on imported drugs.

Most of the company’s products are already locally manufactured, said AstraZeneca CEO Pascal Soriot, but it needs time to transfer the remaining part of its manufacturing to the U.S.

A new plant in Charlottesville, Va., just broke ground on Thursday, which would create around 3,600 jobs in the state, said Trump at the press conference.

The deal appears to confirm that the White House is willing to come to terms with drugmakers, who are eager to move past the political headwinds that have weighed on the pharmaceutical industry since early this year.

The earlier deal with Pfizer, announced on Sept. 30, wiped away many of those concerns.

Trump has talked tough for months about his demand that pharmaceutical companies lower U.S. drug prices to match those charged to other wealthy countries, and has threatened sky-high tariffs on pharmaceuticals for companies that don’t move manufacturing into the U.S.

The threats have led to a parade of announcements of major commitments to invest in U.S. manufacturing plants from a long list of drugmakers. On pricing, the companies have touted direct-to-consumer drug sales, which cut out intermediaries like insurers and pharmacy benefit managers, as an answer to the president’s demands.

The deal Pfizer struck in late September appeared to hand Trump a symbolic victory, while doing no real damage to Pfizer.

Pfizer promised to lower prices immediately for Medicaid buyers, an easy concession since Medicaid prices are already low and the company has relatively little exposure to the Medicaid market. Pfizer also promised to sell new drugs at the same rate it charges to other wealthy nations, the so-called most favored nation rate. That may not result in lower U.S. prices, since Pfizer can manipulate that rate by charging high prices in Europe.

The company also said it would participate in TrumpRx.com. While drugs sold direct-to-consumer will have lower list prices, analysts say the actual net prices realized by the manufacturers are not likely to drop.

Drug stocks rallied on the back of the Pfizer deal. The S&P 500 Pharmaceuticals industry group has gained 8.6% since the announcement, a period in which the broader S&P 500 has dropped 1.6%. The deal has also cleared the way for a rally in biotechnology stocks that’s roughly without precedent since the biotech sector crashed in early 2021. With the Pfizer deal providing a template for how the drug companies can satisfy Trump’s demands without taking major hits, investors came back into the stocks.

Trump and other White House officials had said during the announcement of the Pfizer deal that more companies were in negotiations with the administration. AstraZeneca is now the second past the post.

AstraZeneca’s American depositary receipt is up 29% so far this year.

Write to Evie Liu at evie.liu@barrons.com and Josh Nathan-Kazis at josh.nathan-kazis@barrons.com