Bristol Myers Squibb Secures Tariff Exemption via Medicaid Access Deal
Princeton, Saturday, 20 December 2025.
In a strategic trade-off with the Trump administration, Bristol Myers Squibb secures a three-year tariff exemption by providing Eliquis free to Medicaid and donating seven tons of active pharmaceutical ingredients.
A Landmark Agreement for Supply Chain Resilience
On December 18, 2025, Bristol Myers Squibb (NYSE: BMY) formalized a pivotal agreement with the U.S. government, marking a significant shift in how pharmaceutical giants navigate trade policy and public health obligations [1]. Under the terms of this deal, the company has secured relief from tariffs for a three-year period [1]. In exchange, Bristol Myers Squibb committed to providing its widely prescribed anticoagulant, Eliquis (apixaban), free of charge to the Medicaid program starting January 1, 2026 [1]. Furthermore, to bolster national security and medical independence, the company will donate more than seven tons of the active pharmaceutical ingredient (API) for Eliquis to the U.S. Strategic Active Ingredient Reserve [1].
Financial Health and Market Position
This agreement arrives as Bristol Myers Squibb continues to maintain a robust financial standing, with a market capitalization of $91.80 billion as of December 19, 2025 [2]. In the third quarter of 2025 alone, the company reported revenues of $12.22 billion and a net income of $2.20 billion, underscoring its capacity to absorb the costs associated with the donation and free access program [2]. The tariff relief is particularly critical for the company’s operational margins; while specific tariff costs were not disclosed, the exemption, combined with a guarantee that the company will not be subject to future pricing mandates, provides a stable planning horizon for the next three years [1].
Broader Policy Context: The ‘TrumpRx’ Initiative
The deal with Bristol Myers Squibb is part of a wider administrative push by President Donald Trump to lower drug costs through the “Most Favored Nation” pricing policy [3]. This initiative has roped in nine major pharmaceutical players, including Merck, GlaxoSmithKline, and Pfizer, who have collectively pledged to invest at least $150 billion in U.S. manufacturing [3]. The administration’s “TrumpRx” platform, scheduled to launch in January, aims to facilitate direct consumer access to medications at significantly reduced rates [3]. For instance, under this new pricing structure, Bristol Myers Squibb’s Reyataz is expected to see a price reduction of approximately 85.024 percent, dropping from $1,449 to $217 [3].
Impact on Patient Care and Innovation
The immediate beneficiary of this policy shift is the patient population relying on state-funded healthcare. Since its launch, Eliquis has been prescribed to over 15 million Americans, generating an estimated $3 billion in healthcare cost savings for every 100,000 patients treated due to its efficacy in preventing strokes and blood clots [1]. Christopher Boerner, Ph.D., Board Chair and CEO of Bristol Myers Squibb, emphasized that the move is a direct action to ensure the nation’s most vulnerable have no-cost access to critical medicine [1]. While the company navigates these new regulatory waters, it has also committed to launching future medicines with a pricing approach that is more balanced across developed nations [1].