Novartis Reaches Agreement with US Government to Lower Drug Prices and Expand Manufacturing
Key Insights
Novartis has reached a voluntary agreement with the US government to lower drug prices by launching future medicines with comparable pricing across high-income countries and building direct-to-patient platforms for three existing drugs.
The company will make Mayzent, Rydapt, and Tabrecta available through direct-to-patient platforms accessible via TrumpRx (search) starting in 2026, while applying to participate in the GENEROUS Medicaid cost reduction model.
As part of its $23 billion five-year US investment commitment, Novartis has opened new manufacturing facilities and expects to receive three years of tariff relief in recognition of its expanded infrastructure development.
Novartis announced on December 19, 2025, that it has reached a voluntary agreement with the US government aimed at lowering innovative medicine prices in the United States while supporting continued investment in manufacturing and research and development. The agreement represents a significant step in addressing drug pricing concerns while maintaining incentives for pharmaceutical innovation.
Key Components of the Pricing Agreement
Under the agreement, Novartis has committed to several specific actions to meet the US Administration's drug pricing priorities. The company will launch future medicines with comparable prices across high-income countries, establishing pricing parity that addresses concerns about differential pricing strategies.
The pharmaceutical giant will also build direct-to-patient platforms for three of its existing medicines: Mayzent (siponimod), Rydapt (midostaurin), and Tabrecta (capmatinib). These platforms will be accessible through TrumpRx (search) and are expected to become available in 2026, providing patients with more direct access to these treatments.
Additionally, Novartis plans to apply for participation in the GENEROUS (GENErating cost Reductions fOr U.S. Medicaid) Model, which aims to further improve access to medicines within the US Medicaid program. The company has also committed to supporting efforts to address what it describes as a global imbalance in investment in pharmaceutical innovation.
Manufacturing and Investment Commitments
The agreement builds upon Novartis's substantial investment commitment announced earlier in 2025. The company pledged $23 billion over five years to expand its US research and development and manufacturing infrastructure, demonstrating a significant commitment to domestic production capabilities.
Since announcing this investment in April 2025, Novartis has made considerable progress on its expansion plans. The company announced a new $1.1 billion biomedical research hub in San Diego, California, and broke ground on a flagship manufacturing hub in North Carolina's Raleigh/Durham area, which will include three new facilities with end-to-end manufacturing capabilities across the company's technology platforms.
The company has also opened a new radioligand therapy (RLT) manufacturing facility in Carlsbad, California, enabling coast-to-coast manufacturing of these specialized treatments. Plans are advancing for additional RLT manufacturing facilities in Florida and Texas, further expanding the company's domestic production capacity.
Industry and Policy Implications
"This agreement continues our long-term partnership with the US government to advance the development and manufacturing of breakthrough treatments for patients in the United States," said Vas Narasimhan, CEO of Novartis. "We are committed to working with governments worldwide to ensure innovation is appropriately valued and that our medicines reach the patients who need them most."
In recognition of its substantial investment in US infrastructure, Novartis expects to receive three years of tariff relief, providing economic incentives that support the company's domestic expansion plans.
The agreement represents a notable example of voluntary industry cooperation with government pricing initiatives, potentially serving as a model for other pharmaceutical companies facing similar pricing pressures. By combining pricing commitments with substantial manufacturing investments, Novartis has positioned itself to maintain market access while demonstrating responsiveness to policy priorities.
The direct-to-patient platforms for the three specified medicines could represent a significant shift in how patients access these treatments, potentially reducing intermediary costs and improving treatment accessibility. The success of these platforms may influence broader industry approaches to drug distribution and pricing strategies.