This audio is automatically generated. Please let us know if you have any comments.
AbbVie is the latest among more than a dozen of the world’s biggest drugmakers to sign a drug pricing deal with the White House, announcing a deal late Monday to invest $100 billion in U.S. pharmaceutical research and manufacturing and reduce some product costs in exchange for tariff relief.
As with the many other disclosed deals between the Trump administration and big drug companies, the deal is short on details, as well as its potential impact on AbbVie’s earnings. AbbVie said only that it will offer “low prices” to Medicaid and increase efforts to sell through a government portal widely used drugs such as Humira, Alphagan, Combigan and Synthroid, all of which are off-patent and face competition from lower-cost biosimilars or generics.
AbbVie will also commit to spending $100 billion on US research and development as well as capital investments over the next decade, a significant increase from its previous pledge. That pledge leaves AbbVie exempt, for three years, from the Trump administration’s tariffs or future drug pricing mandates. Several other drug manufacturers, such as Pfizer, Merck & Co. and Gilead Sciences, have obtained similar compensation in recent settlements.
Additional terms remain confidential, AbbVie said. The company did not mention any specific effects on its financial guidance.
The deal is part of a broader push by Trump to align the prices American consumers pay with those in many countries abroad. This concept of “most favored nation” pricing was a target during Trump’s first term, and the administration revived the effort earlier this year through a lobbying campaign against the pharmaceutical industry.
In July, Trump sent letters to 17 major drug makers giving them about two months to lower prices or face an unspecified government response. Since then, 16 have announced deals, many of which offer discounts on drugs that were already deeply discounted or nearing the end of their useful lives. Typically, companies get three years of reduced rates in return.
Drugmakers have described these deals as “manageable,” and Wall Street analysts have suggested they are unlikely to deter future growth. Pharmaceutical stocks, which had been pressured by threats of tariffs and prices in early 2025, have since recovered. AbbVie shares, for example, are up about 30% since last April, when Trump threatened the industry with “significant” tariffs.
In an investor survey published last week, analysts at RBC Capital Markets said the regulatory landscape is now seen as the industry’s biggest issue. Investors are “less bearish” on drug prices and policy, they wrote.
