Merck announced a new drug‑price agreement with the U.S. government that will see the company offer its diabetes products Januvia, Janumet and Janumet XR at roughly 70 % off list price for cash‑paying patients and at the lowest “most‑favored‑nation” price for Medicaid. In return, Merck receives a three‑year exemption from the administration’s planned pharmaceutical tariffs and commits to investing more than $70 billion in U.S. manufacturing and research and development over the next several years.
The agreement also covers the experimental cholesterol drug enlicitide, which is slated for inclusion if it receives FDA approval. The pricing concession for Januvia, Janumet and Janumet XR is expected to reduce revenue from these products, but the tariff exemption and the large U.S. investment pledge are designed to offset the loss and to signal Merck’s long‑term commitment to domestic production and innovation.
Merck’s decision to lower prices comes amid the Trump administration’s broader “most‑favored‑nation” initiative, which saw nine major pharmaceutical companies—including Amgen, Bristol Myers Squibb, and Novartis—sign similar deals on the same day. The initiative also includes the launch of TrumpRx.gov, a government website that will direct consumers to manufacturers’ sites for discounted purchases. The collective $150 billion investment pledge from the nine companies is intended to strengthen U.S. supply chains and create jobs.
The company’s CEO, Robert M. Davis, said the agreement “marks a pivotal step in ensuring Americans can access medicines they need at lower costs” and highlighted that pricing disparities have shifted the burden of research and development onto the U.S. health‑care system. The statement underscores Merck’s rationale for entering the agreement: to address pricing imbalances while maintaining its competitive position in the face of upcoming generic competition for Januvia, which is expected to enter the market in 2026.
While specific market reaction data are not available, the agreement represents a significant shift in Merck’s pricing strategy and regulatory exposure. The tariff exemption provides cost certainty for the next three years, and the $70 billion investment pledge signals a long‑term commitment to U.S. operations that could support future growth and innovation.
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