Drug pricing has been hanging over the pharmaceutical industry for years, and the Trump administration didn’t eliminate that pressure. It did, however, pursue voluntary pricing agreements with many of the industry’s largest drugmakers. Since late 2025, the Trump administration has reached voluntary most-favored-nation (MFN) pricing agreements with 17 of the world’s largest pharmaceutical manufacturers, including Pfizer (PFE +1.32%), AbbVie (ABBV 0.03%), and Bristol Myers Squibb (BMY +3.06%).
These agreements generally align prices for certain drugs with those paid in comparable developed countries, expand discounted direct-to-consumer purchasing through the TrumpRx platform, and provide MFN pricing for certain Medicaid purchases. So the obvious question is: Will lower drug prices automatically translate into lower profits? Let’s take a closer look and find out.
Image source: Getty Images.
Pfizer moved first
Pfizer became the first major pharmaceutical company to reach an agreement with the administration, offering discounts on more than 30 branded medicines. Management has framed the initiative as a way to improve affordability while preserving incentives for pharmaceutical innovation.
Now, that might appear negative for revenue; lower prices generally mean the company makes less per prescription. But Pfizer has another problem that arguably matters more: It needs to replace revenue lost from the decline of its COVID-19 products. The company’s own projections assumes an additional $1.5 billion decline in COVID-related revenue, separate from revenue pressure caused by patent expirations.
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That said, Pfizer is investing heavily in oncology, vaccines, and obesity treatments, while pursuing additional cost reductions. A clearer pricing framework, even if it results in somewhat lower prices, could reduce regulatory uncertainty and help management make longer-term capital allocation decisions.
AbbVie has more flexibility
Compared to Pfizer, AbbVie enters this environment from a position of strength. You see, Humira, once the world’s best-selling drug, has already faced years of biosimilar competition. Management spent considerable time preparing for that transition with newer immunology drugs Skyrizi and Rinvoq, which now drive much of the company’s growth.
Those products continue posting strong double-digit percentage sales increases, giving AbbVie a much more diversified business than it had just a few years ago. Skyrizi has become one of its most important growth drivers, generating nearly $4.5 billion in first-quarter 2026 sales, up 31% from a year earlier. Rinvoq continues delivering strong growth across multiple autoimmune diseases, including rheumatoid arthritis, Crohn’s disease, ulcerative colitis, and atopic dermatitis. In the first quarter, Rinvoq revenue increased 23% year over year to roughly $2.1 billion, making it one of AbbVie’s fastest-growing blockbuster medicines.
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Together, the two therapies are generating billions of dollars in annual revenue and are expected to more than offset the decline in Humira sales over the next several years. That transition leaves AbbVie less dependent on a single blockbuster drug and better positioned to absorb future pricing pressure.
Bristol Myers Squibb needs to fill a gap
Bristol Myers Squibb faces a different challenge, as drug pricing isn’t its only issue. Several of its top-selling products are already approaching (or facing) patent expirations, meaning they will be hit with competition from cheaper imitations. Revlimid has been steadily losing revenue as generic competition expands, while Eliquis, its blockbuster blood thinner co-marketed with Pfizer, is expected to face similar pressure later this decade.
Together, those products have generated tens of billions of dollars in annual sales, leaving Bristol Myers with a significant revenue gap to fill. Management has responded by launching newer medicines, expanding its late-stage pipeline, and pursuing acquisitions to strengthen its oncology, immunology, and cardiovascular portfolios. Whether those newer therapies can replace the revenue lost from aging blockbusters will likely have a much greater impact on long-term earnings than modest changes in drug pricing.
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The industry appears to be adapting
So far, it seems as though the industry is adapting calmly, without any major red flags. And rather than mounting broad public opposition, many large pharmaceutical companies have chosen to negotiate. By April 2026, agreements included manufacturers that represent roughly 86% of the branded U.S. pharmaceutical market.
This is mostly the result of investor behavior. It’s no secret that investors generally dislike regulatory uncertainty more than they dislike modest reductions in profitability. And the agreements may also provide other benefits, including tariff relief for participating manufacturers that expand U.S. production under separate administration policies. To put it simply: Complying, rather than fighting, was the most reasonable and sound strategy.
To be sure, drug pricing is becoming a larger factor in pharmaceutical investing, but it shouldn’t become the only factor. Pipeline quality, research productivity, acquisitions, and manufacturing execution will continue driving long-term shareholder returns.
For Pfizer, the priority remains rebuilding growth beyond COVID products. For AbbVie, it’s sustaining momentum from Skyrizi and Rinvoq. For Bristol Myers, success depends largely on replacing aging blockbuster products with next-generation therapies.
The new pricing agreements certainly change the industry’s operating environment. But they don’t eliminate what has always mattered most in pharmaceuticals: Companies that consistently develop valuable new medicines tend to create the most value for shareholders over time.
