Pfizer secures three-year reprieve from Trump tariffs by agreeing to slash US drug prices

Pfizer secured a three-year reprieve from US President Donald Trump's long-threatened tariffs on the pharmaceutical industry on Sept 30 by agreeing to slash some of its US drug prices by up to 85 per cent and selling directly to the American public, a move other major drugmakers are expected to follow.

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Pfizer said it will ensure Americans receive comparable prices to those offered in other countries and will launch new medicines at parity, addressing a key complaint that Americans unfairly shoulder the highest medical costs in the world.

It is the latest example of the transactional nature of winning tariff exemptions from Mr Trump, who has unilaterally wielded trade policy to exert power over multiple industries.

He said last week that his administration would impose 100 per cent duties on branded pharmaceuticals starting on Oct 1 unless a company was building US manufacturing plants.

The latest comments from him and his advisers indicate that the threat was a negotiating ploy to get companies to lower prices on their products.

Similar deals could be forthcoming. Eli Lilly said it is in active discussions with the administration to further expand patient access, as the announcement on Sept 30 underscores the urgency of making medicines more affordable.

US Commerce Secretary Howard Lutnick suggested the administration was holding its national security probe into pharmaceutical imports that could pave the way for new tariffs, as officials engage in talks with major drugmakers.

"While we're negotiating with these companies, we're going to let them play out and finish these negotiations," Mr Lutnick said.

The latest deal appears to resolve two major threats facing Pfizer.