Pharmaceutical companies do not make deals without a profit incentive- Pfizer's price reductions to Medicaid drugs is a cash cow for the company

Echo opinion published in the Los Angeles Times by business column writer Michael Hiltzik

 Trump’s deal with Pfizer on drug prices won’t do much for American patients, but it’s a great cash cow 💲 🐄🐄for Pfizer.

Pfizer accused of ‘bringing discredit’ on pharmaceutical industry after Covid social media posts. Watchdog rules company breached regulatory code five times including promoting unlicensed medicines. The Telegraph report August 2024 by Camilla Turner.

If you had nothing better to do on September 30, 2025, you might have tuned in to a White House event at which President Trump, standing side-by-side with Albert Bourla, the chief executive of Pfizer, announced a deal with the big drug company that was described from the podium as “a massive win for the American people.”

Under the deal, according to the administration, Pfizer will sell its drugs to Americans “at a deep discount” from their list price. Pfizer, for its part, said the arrangement ensures that “U.S. patients pay lower prices for their prescription medicine.”

(US media has no understanding about how Medicaid is administered. In fact Medicaid beneficiaries do not pay for their medications so the "deal" announced to save money only benefits the Pfizer company and the federal government as the payor for the drugs. Medicaid beneficiaries qualify for this benefit based on their income and disabilities.)

As is the case with so many pronouncements issued from the Trump White House, there’s much less to this deal than meets the eye. Whether it will effectively reduce spending on prescription drugs for most Americans — or any Americans — is highly doubtful.

For Pfizer, however, this is a fabulous deal — never mind that the news media has portrayed it just as the White House and Pfizer hoped, as a major concession by the company to help the average consumer.

The truth is that the company won’t be suffering any significant reduction in revenue or profits by offering these “discounts.” It will, however, be exempted for three years from tariffs of 100% that Trump had threatened to impose on drugmakers.

How do we know that Pfizer is the principal beneficiary of the deal? Its stock price has risen nearly 15% in the five trading days since the announcement. Do you think that a deal that cut consumer prices for a company’s most popular products would really produce a stock market gain? Me neither.

Accordingly, it’s proper to take a close look at what we know, and more importantly, what we don’t know, about this deal.

“We’re still in a place where we don’t know everything we want to know,” said Peter Maybarduk, head of the access to medicines group of the nonprofit consumer organization Public Citizen. 

“That’s unfortunate, but it’s also by design.” Public Citizen has filed a Freedom of Information Act request for documentation about the deal.

Pfizer and the White House both describe the deal terms as “confidential.” Pfizer told me that “more details” will be made available as the January implementation date draws nigh. The White House asserts that this deal is secret because it’s working out deals with other drug manufacturers.