Pharma companies left out of early negotiations are scrambling behind the scenes to avoid tariffs, Medicare price controls, and a sweeping overhaul of U.S. drug pricing.
A new wave of quiet negotiations is unfolding in Washington as pharmaceutical companies not initially targeted by President Donald Trump’s drug-pricing initiative seek to strike their own agreements — hoping to avoid potentially harsh tariffs and government-imposed price limits.
According to multiple industry sources, several drugmakers have begun reaching out directly to the White House and the Centers for Medicare & Medicaid Services (CMS) to explore whether they can secure similar arrangements to those already granted to larger rivals.
The outreach signals growing anxiety across the sector as companies attempt to navigate what could become one of the most consequential shifts in U.S. pharmaceutical pricing in decades.
A Two-Tier Industry Emerges
So far, 16 major drugmakers — including Pfizer and Eli Lilly — have already reached agreements with the administration after receiving directive letters instructing them to lower U.S. prices.
But many other companies, including roughly half of those represented by the powerful trade group PhRMA, have not received such letters — leaving them in a state of regulatory limbo.
One industry source said companies still lack clear guidance on how they are supposed to proceed if they were not invited to negotiate in the first place.
White House spokesman Kush Desai said the administration’s objective is broad:
The administration wants to negotiate deals that “meaningfully lower drug prices for American patients with every pharmaceutical company.”
Yet how — or whether — that will apply uniformly remains unclear.
Fear of Medicare Price-Setting Drives the Scramble
At the center of the concern are proposed Medicare pilot programs known as GLOBE and GUARD, which could impose “most-favored-nation” pricing models across large parts of the U.S. healthcare system.
These programs would require manufacturers to issue rebates if U.S. prices exceed those paid internationally — a mechanism that could dramatically compress margins in the world’s most profitable drug market.
For companies without negotiated protections, the risk is substantial: Medicare covers tens of millions of Americans aged 65 and older, making it far more financially significant than Medicaid, where pricing concessions have historically been deeper but applied to a smaller share of total spending.
Smaller and Mid-Sized Firms Say the Math Doesn’t Work
While the largest pharmaceutical companies may be able to offset concessions with broad product portfolios, mid-sized biotech firms warn they lack the flexibility to structure similar trade-offs.
Some have banded together to form a new advocacy group, the Midsized Biotech Alliance of America, whose members include Alkermes, BioMarin, Incyte, and Alnylam.
Their concern: they may be forced into pricing frameworks designed for multinational giants with vastly different revenue structures.
One industry lobbyist described the fear bluntly, saying many companies worry they will be stuck with deals “that work for the bigger guys and don’t work for the mid-sized guys.”
Global Licensing Complicates Pricing Adjustments
Another challenge lies in how many biotech firms operate internationally.
Some companies license their therapies to overseas partners who control pricing abroad — and may have little incentive to raise prices simply to help U.S. counterparts maintain higher domestic levels.
That dynamic could trigger automatic price reductions under the proposed Medicare models, even if the U.S. manufacturer has limited control over foreign pricing decisions.
Executives Call for Equal Treatment
Industry leaders argue that selective negotiations risk creating an uneven playing field.
Bayer pharmaceuticals chief Stefan Oelrich said companies that were not initially contacted should still be allowed to reach similar arrangements.
“Otherwise that would be very odd, that only because you have size you would get different treatment,” he said.
Sanofi CEO Paul Hudson echoed that uncertainty earlier this year, questioning what options remain for the large number of companies still outside formal agreements.
He suggested the administration may ultimately need to introduce a broader, standardized framework rather than attempting dozens of individualized negotiations.
Why the Stakes Are So High
The United States currently pays significantly more for prescription medicines than other developed countries — often nearly three times as much — making it a prime target for policy reform.
The deals already struck apply primarily to Medicaid, which accounts for about 10% of U.S. drug spending and already receives steep discounts, sometimes exceeding 80%.
By contrast, extending pricing controls into Medicare would reshape the economics of the industry, affecting a much larger patient base and revenue pool.
A Policy Shift That Could Redefine the Pharma Landscape
What began as a targeted pricing initiative is now rippling across the entire pharmaceutical ecosystem, forcing companies to rethink pricing strategies, partnerships, and even product portfolios.
Large multinationals may have already secured a path forward.
But for mid-sized innovators — often responsible for breakthrough therapies — the rules of engagement remain uncertain.
As companies lobby for inclusion in negotiations, Washington faces a delicate balancing act: lowering drug costs for patients without disrupting the pipeline of new treatments.
Behind closed doors, the next phase of U.S. drug pricing reform is being negotiated — not just between government and industry, but among companies themselves racing to avoid being left on the wrong side of the new system.