The Trump administration and Pfizer reached an agreement for most-favored-nation pricing in Medicaid programs and pricing parity for new drug launches. Pfizer shares rose over 6%. The agreement helps Pfizer avoid further pricing pressure from rulemaking or legislation and secures a three-year grace period for Section 232 tariffs. We retain a $36 fair value estimate for Pfizer.

Pfizer plans to make more drugs available for direct purchase through its own platform and other platforms at prices similar to those offered to large pharmacy benefit managers, with discounts up to 80%. This announcement could allow Pfizer to focus on pipeline advancement and potential growth opportunities from acquisitions like Metsera and Seagen.

Read more at Morningstar: First Out of the Gate With a Drug Pricing Agreement; Positioned to Avoid Major Headwind