GSK strikes deal to cut drug prices with US government
GSK has struck a voluntary agreement with the US government to lower the cost of prescription medicines and expand access to treatments for millions of Americans.
The move comes as pressure mounts on global drugmakers over pricing, tariffs, and domestic investment.
The London-listed pharma giant said the deal covers medicines used by over 40m US patients living with respiratory conditions like asthma, and delivers on all four actions requested by Donald Trump in a letter sent to drugmakers back in July.
Under the agreement, GSK will reduce prices for certain medicines supplied through Medicaid, and commit to launching new products across the pond with a more ‘balanced’ pricing approach.
The firm will also make most of its portfolio available via a direct purchasing platform, offering savings of up to 66 per cent.
This should broaden access beyond traditional reimbursement routes, the company said.
GSK to build US reserves
Alongside pricing concessions, the deal includes commitments designed to shore up American drug supply chains.
As part of the administration’s Strategic Active Pharmaceutical Ingredients Reserve (SAPIR), GSK will secure a US-based reserve of albuterol, a critical ingredient used in many asthma inhalers.
The agreement covers both GSK and its HIV-focused joint venture, ViiV Healthcare, and aims to provide clarity on US pricing rules while excluding both firms from so-called ‘section 232’ tariffs for three years.
Detailed commercial terms have not yet been disclosed.
Chief executive Emma Walmsley said: “GSK has been at the forefront of respiratory innovation for decades – helping millions of Americans prevent and treat chronic respiratory diseases such as asthma and COPD”.
“Through this agreement, GSK will ensure patients have access to the current portfolio of respiratory medicines while bringing the next wave of innovation to American patients”.
Investment backdrop
The deal comes amid intensifying scrutiny of drug pricing in the US, alongside rising trade tensions and the threat of tariffs on overseas imports.
In September, GSK unveiled plans to invest over $30bn (£22.4bn) in US research and development in the next five years.
This included a $2bn investment in new commitments to facilities, AI and advanced digital tech.
The investment is expected to generate hundreds of high-skilled jobs too, and builds on the firm’s existing US workforce of around 15,000 people.
While the scale of US spend has drawn comparisons with the group’s smaller UK R&D budget, GSK has insisted the move doesn’t represent a loss of confidence in Britain.
The company pointed to a roughly 50 per cent increase in UK investment over recent years.
The agreement with the US also lands as GSK continues to reassure its investors over its exposure to tariffs and pricing reforms.
Shares climbed in October after the pharma giant upgraded its full year guidance, saying it had identified mitigation options to manage tariff risks.