CSL signs deal with Trump administration to slash prices for its medicines

Australia’s largest pharma company CSL said it has signed agreements with the Trump administration to lower the cost of its medicines in the United States as it seeks to avoid the 100 per cent tariffs slapped on Australian-made pharmaceuticals earlier this year.

As part of the deal, the Melbourne-based biotech will provide discounts on its medicines for the US Medicaid program so that their prices will be comparable to those available in other developed countries. CSL has also agreed to price-match any newly launched therapies in the US.

CSL is one of nine global biotech companies and drugmakers that signed such drug pricing agreements with the US government. It was the latest instalment in a string of splashy White House events with pharmaceutical executives and US President Donald Trump aimed at spotlighting healthcare affordability ahead of the US midterm elections. Others include Indian pharma giant Sun Pharmaceuticals Industries and Israel’s Teva Pharmaceutical Industries.

Trump said in the White House event overnight that pharmaceutical companies “make most of their money from the United States, meaning they’re ripping us off. But not any longer.”

The president claimed the additions mean 26 companies representing 90 per cent of the US pharmaceutical market have now signed on to his administration’s most-favoured nation discounts and that “the other 10 per cent are coming in — they have no choice,” he added.

CSL said it has also signed an “onshoring agreement” with the US Department of Commerce committing to its planned $US1.5 billion ($2.1 billion) expansion of its plasma-therapies plant in Illinois, as announced in March.

Collectively the nine new companies have agreed to invest $US19.6 billion in US manufacturing “in the near term,” a White House fact sheet said. Several companies also committed to provide active pharmaceutical ingredients for America’s strategic reserve.

The deals come after an executive order from Trump in April slapped a 100 per cent tariff on imports of patented drugs. The European Union, Japan, South Korea and Switzerland all secured rates of just 15 per cent, however Australia missed out on such carve-outs. Trump’s executive order reduced the tariff to 20 per cent for companies that move production to the US.

The tariff shock followed complaints by the US pharmaceutical sector about Australia’s PBS, which subsidises the cost of medicines and which US drugmakers believe “undervalues American innovation through unfair drug pricing practices ”.

However, the impact on CSL, which exports significant volumes of plasma to the US, was expected to be at least partially ameliorated by US government carve-outs for plasma-derived therapies.

CSL said in a statement to the ASX on Tuesday morning that the agreement provided the company “with additional certainty regarding its exposure to US drug pricing” and certain tariffs. It doesn’t expect “any material impact” during fiscal year 2027.

Starting last year, the Trump administration struck so-called most-favoured nation drug-pricing deals with 17 large pharmaceutical companies including pharma giants like Pfizer and Eli Lilly.