AstraZeneca Plc has become the second global pharmaceutical company to sign an agreement with the Trump Administration to lower the prices of its medicines sold in the US. In parallel it will increase its manufacturing presence in the country and upgrade its share listing. Pfizer Inc signed a similar agreement with the government on 30 September. The deals are applications of the World Trade Organization’s most-favoured nation principle (MFN) under which favourable terms of trade, like lower tariffs, extended to one country are granted to other WHO members as well.
Announced on 11 October, the agreement with AstraZeneca stipulates that patients in the US will have access to medicines at prices that are equal to those in other wealthy countries. Prices in Europe are generally lower than those in the US. The company will therefore introduce a discount of up to 80% in the list price of prescription medicines for chronic diseases. It will further support a new platform, called TrumpRx.gov, where patients will be able to buy these medicines at the reduced prices. Separately, the US will delay the imposition of tariffs on the company’s products for three years giving AstraZeneca time to increase its US manufacturing presence.
The agreement coincides with an upgrading of the company’s US share listing. Currently, AstraZeneca is listed on the US Nasdaq market via American Depositary Receipts (ADRs). These are certificates issued by a US depositary bank confirming an investor’s ownership of shares in a non-US company. This listing will be replaced by a direct listing of the company’s shares on the New York Stock Exchange without the need for depositary documents. AstraZeneca said the change will enable investors to trade its stocks seamlessly across markets in New York, and in London and Stockholm where it is also listed. The company noted that the new structure will not change its status as a UK listed, headquartered, and tax resident company. “The company will remain bound by applicable UK governance principles and standards,” it said.
AstraZeneca has committed to make $50 billion in manufacturing and R&D investments in the US over the next five years. Part of this is a planned outlay of $4.5 billion for a new manufacturing site in Virginia. The facility will produce the active ingredients for the company’s weight management and metabolic portfolio, including oral glucagon-like peptide-1 receptor agonists, and combination small molecule products. The facility will employ 600 skilled workers and recruit a further 3,000 people to build the facility.
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