Gilead Sciences announced a new agreement with the U.S. government that grants the company a three‑year exemption from planned pharmaceutical tariffs in return for a $32 billion commitment to U.S. manufacturing, research and development, and infrastructure over the next five years. The deal also requires Gilead to provide its HIV prevention medicine lenacapavir at no profit to up to two million individuals in the world’s most severely affected countries for three years, and to list its hepatitis C treatment Epclusa on the TrumpRx.gov platform at a cash price no higher than that charged in other wealthy nations. Cash‑pay patients will receive significant discounts on selected medications as part of the agreement.
The tariff exemption removes a projected $1.5 billion in annual costs that would have been imposed under the U.S. Trade Representative’s proposed pharmaceutical tariff schedule. In exchange, Gilead’s $32 billion investment is earmarked for expanding U.S. production capacity, hiring 5,000 new scientists and engineers, and upgrading facilities to meet the latest regulatory standards. The investment is expected to create 10,000 jobs over five years and to strengthen the company’s supply chain resilience.
Lenacapavir, a long‑acting HIV pre‑exposure prophylaxis (PrEP) agent, will be offered at no profit to up to two million people in countries with the highest HIV incidence, such as South Africa, Nigeria, and India. The program is designed to reduce new HIV infections by 30 % in the target regions and to position Gilead as a leader in global public‑health access. The agreement also includes a clause that allows Gilead to provide cash‑pay discounts of up to 40 % on selected drugs, a move that is expected to improve affordability for uninsured patients and to mitigate pressure from Medicare Part D reforms.
Gilead’s Q3 2025 financial results provide context for the agreement. Revenue rose 3 % to $7.8 billion, driven by a 4 % increase in HIV product sales to $5.3 billion and a 6 % rise in Biktarvy sales to $3.8 billion. Gross margin remained flat at 78.6 % versus 79.1 % in Q3 2024, reflecting a mix shift toward higher‑margin specialty products. Operating margin expanded to 50 % from 48 % in the prior quarter, largely due to cost‑control initiatives and the absence of one‑time restructuring charges. Earnings per share of $2.47 beat consensus estimates of $2.15 by $0.32, a 15 % beat, driven by strong HIV sales, disciplined cost management, and the elimination of a $200 million one‑time legal settlement that had been booked in Q2 2025.
Management highlighted the agreement as a “foundational commitment to affordability and future innovation.” CEO Daniel O’Day said the U.S. investment would “meaningfully contribute to America’s health and economic priorities” and that the lenacapavir program would “expand access to a life‑saving therapy for millions of people worldwide.” The company also raised its full‑year 2025 product sales forecast to $28.4–$28.7 billion and its earnings outlook to $8.05–$8.25 per share, signaling confidence in continued growth despite Medicare Part D headwinds that could reduce revenue by $1.1 billion in 2025.
The agreement is expected to mitigate regulatory pressure and strengthen Gilead’s competitive moat in HIV and hepatitis markets. By securing tariff relief and committing to U.S. investment, the company positions itself to maintain pricing power while expanding access, which could offset the anticipated revenue impact of Medicare Part D reforms. The TrumpRx.gov listing and cash‑pay discounts are likely to improve market penetration in price‑sensitive segments, supporting the company’s long‑term growth strategy.
The deal also aligns with the Trump administration’s broader drug‑pricing initiatives, including the Most Favored Nation pricing framework. Analysts noted that the agreement’s pricing commitments could reduce the company’s exposure to future tariff hikes and enhance its reputation as a partner in public‑health access.
Overall, the agreement represents a significant strategic shift toward affordability and regulatory cooperation, reinforcing Gilead’s leadership in HIV and hepatitis while positioning the company for sustained growth in the U.S. market.
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