North Chicago-based AbbVie has become the latest drugmaker to reach a deal with the Trump administration on drug prices in exchange for exemptions from tariffs and future price mandates, the company announced Monday evening.
Under the voluntary agreement, AbbVie will offer “low prices” in Medicaid, a state and federally funded health insurance program for people with low incomes and disabilities, the company said in a news release. AbbVie will also invest $100 billion in U.S.-based research, development and building, including for manufacturing, over the next decade, according to the release.
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It will also sell more medications directly to consumers through TrumpRx. TrumpRx is an online platform, expected to launch this month, that will allow people to buy medications directly from manufacturers.
The deal “was enabled by the Trump administration providing exemption from tariffs and future price mandates,” AbbVie said in its news release.
“AbbVie is following President Trump’s call to action by reaching this agreement, allowing us to collectively move beyond policies that harm American innovation,” said Robert Michael, chairman and CEO at AbbVie in the news release.
AbbVie plans to offer the medications Humira, Alphagan, Synthroid and Combigan on TrumpRx.
In recent months, the Trump administration has announced more than a dozen similar deals with drugmakers, including Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Genentech, Gilead Sciences, GSK, Merck, Novartis and Sanofi.
The agreements follow an executive order issued by Trump in May that sought to bring most-favored-nation pricing on medications to Americans. Most-favored-nation pricing means that medication prices in the U.S. would match the lowest prices for the same drugs in other economically-similar countries.
In July, the Trump administration sent letters to 17 pharmaceutical companies, including AbbVie, instructing them to take steps to offer most-favored-nation pricing in the U.S., and saying that if they didn’t, the government would “deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.”
Trump then announced in September that he planned to impose 100% tariffs on imported “branded or patented” pharmaceuticals, but shortly thereafter, his administration said those tariffs would be paused as the administration negotiated with drugmakers, according to Politico.
Kathleen Iacocca, an associate professor at Villanova University, said Tuesday it was “strategically wise” for AbbVie to make the deal with the government.
“Something that seems more valuable than even the tariff relief is it gives (drugmakers) better relationships with the government as the government is clearly moving forward with pricing controls,” Iacocca said. “It’s better to play with them than try to be against them.”
The deals, along with TrumpRx, should also bring more transparency in drug pricing in the U.S., she said. People who use private insurance to get medications might not see much of a price difference, but those on Medicaid and people who want to buy medications directly from manufacturers through TrumpRx, without using insurance, should see reduced prices, she said.
Earlier on Monday, AbbVie announced plans to expand its U.S. manufacturing by acquiring a facility in Arizona. The company also announced last year that it would construct a new $195 million facility near its headquarters in North Chicago.
AbbVie spun off from Abbott Laboratories in 2013 and has about 29,000 employees in the U.S. The company is known for medications, including Humira, which is used to treat rheumatoid arthritis, Crohn’s disease, ulcerative colitis and other conditions, as well as the drugs Skyrizi, which treats plaque psoriasis, and Rinvoq for rheumatoid arthritis.