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# Nine More Drugmakers Signed the Pricing Deal, and the Tariff Explains Why
- URL: https://millionaire-insiders.ghost.io/nine-more-drugmakers-signed-the-pricing-deal-and-the-tariff-explains-why/
- Published: 2026-09-12T11:30:28.000Z
- Updated: 2026-09-12T11:30:27.000Z
- Author: Daniel Whitmore

On August 31 another nine pharmaceutical companies agreed to most-favored-nation pricing with the administration, among them Teva, CSL, Astellas, Sun Pharma and UCB. They join seventeen firms that signed earlier, and the White House now describes the arrangements as covering the drugs behind roughly 90% of American prescriptions.  
  
The terms are consistent across the deals: Medicaid pays what other wealthy countries pay, some products are offered directly to cash-paying patients through a government site, and the companies commit to moving production to the United States. The interesting part is not what they give. It is what they get.

### The tariff is the reason the deals exist

In April the administration imposed a 100% tariff on patented pharmaceutical products and their ingredients, phased in over 120 days for large manufacturers and 180 for smaller ones. Several trading partners negotiated lower rates, with the European Union, Japan, Korea and Switzerland at 15%. Companies signing onshoring agreements pay 20% instead of 100%.  
  
Companies that sign the pricing deal pay nothing at all, through January 2029.  
  
Read in that order, the sequence stops looking like voluntary corporate goodwill and starts looking like a straightforward trade. A 100% tariff on a company's core products is an existential number. Accepting European reference prices on the Medicaid book, which is a modest share of most manufacturers' US revenue, is a comparatively cheap way to make that number go away for three years.  
  
This is the same architecture now being applied to semiconductors, where the announced framework is build here and pay nothing, build elsewhere and pay to enter. The tariff sets a price for non-compliance and the exemption does the actual policy work.

### What it does and does not do to earnings

**Whitmore's Watchlist:** 
**XLV** (Health Care Select Sector SPDR Fund): Broad sector exposure spanning pharma, providers and devices, which dilutes single-company policy risk.  
**TEVA** (Teva Pharmaceutical Industries): One of the newest signatories, and a useful read on how the market prices the trade-off.  
**IHI** (iShares U.S. Medical Devices ETF): Devices sit outside the drug-pricing framework entirely, which is its own kind of information.

Independent estimates put the Medicaid savings from most-favored-nation pricing near $8.6 billion a year. Against national drug spending that is real money and not a structural change, and analysts have been direct about the limits. Most Medicaid enrollees already pay very little out of pocket, so the benefit accrues mainly to the program's budget rather than to patients at the counter.  
  
The longer-run concern raised by researchers is more relevant to shareholders: companies that concede on one book of business have historically recovered the margin elsewhere. If reference pricing on Medicaid is offset by commercial price increases, the sector's revenue line survives the deal largely intact, which is roughly how the equity market has treated it.  
  
There is also a distinction worth drawing between the two halves of the sector. Reference pricing and pharmaceutical tariffs apply to patented drugs and their ingredients. Generic manufacturers, medical device makers and the service businesses around them sit largely outside the framework, which is why sector-level exposure and single-company exposure have behaved so differently through this year.  
  
The genuine cost sits in the onshoring commitments. Building US manufacturing capacity is capital that could otherwise fund research or buybacks, and it lands over years rather than quarters.

### The part that is not settled

Congressional interest in most-favored-nation pricing has been growing, and several of the mechanisms involved rest on executive action rather than statute. That is the same fragility the emergency tariff authority discovered when it reached the Supreme Court in February. An arrangement built on executive discretion can be undone by a court, a successor, or a change in the tariff that made it attractive in the first place.  
  
For a sector that plans in decade-long development cycles, a three-year tariff holiday is a short horizon. The companies signing these deals know that, which is part of why the onshoring commitments matter more to them than the pricing concessions.  
  
**Whitmore's Take**: These agreements are better understood as tariff management than as drug pricing reform, and that framing explains both why so many companies signed and why the savings estimates keep coming in modest.

![](https://storage.ghost.io/c/e9/10/e9109ad9-55f9-4e96-a078-46af25115156/content/images/2026/09/drug-pricing-mfn-2.jpg)

*Written by Daniel Whitmore* 
*Millionaire Insiders*