Johnson & Johnson Agrees to Lower Drug Prices in Exchange for Tariff Exemptions

2026-01-10 companies

New Brunswick, Saturday, 10 January 2026.
Securing crucial tariff exemptions, Johnson & Johnson agrees to slash U.S. drug prices to match international rates, becoming the latest industry giant to join the administration’s TrumpRx.gov initiative.

Strategic Compliance Through TrumpRx.gov

Under the terms of the agreement announced on Thursday, January 8, 2026, Johnson & Johnson (JNJ) has committed to participating in the federal government’s direct-to-consumer platform, TrumpRx.gov [1][3]. This initiative allows American patients to purchase the company’s medicines at significantly discounted rates, bypassing traditional intermediaries [2][8]. Furthermore, the pharmaceutical giant agreed to benchmark its pricing for the Medicaid program against international standards, ensuring that costs are comparable to those found in other developed countries [1][5]. This move directly addresses the disparity where U.S. patients have historically paid nearly three times more for prescription medicines than their counterparts in other wealthy nations [1][8].

Tariff Immunity and Industry Pressure

In exchange for these pricing concessions, Johnson & Johnson secured a critical exemption from U.S. tariffs on its imported pharmaceutical products [1][2]. While specific terms remain confidential, reports indicate these are three-year exemptions from potential levies [5][6]. This agreement provides immunity against the 100% tariffs on imported branded pharmaceuticals that the Trump administration threatened in April 2025 [4]. Johnson & Johnson was one of 17 major pharmaceutical companies explicitly called out by President Trump last summer to lower prices under his administration’s “Most Favored Nation” (MFN) policy [5][7]. With this deal, J&J becomes the 15th company to comply, leaving AbbVie and Regeneron Pharmaceuticals as the only remaining holdouts from the original list of targeted firms [6][7].

Expanding Domestic Manufacturing

Beyond pricing adjustments, the agreement underscores a massive push toward onshoring pharmaceutical production. Johnson & Johnson is proceeding with a $55 billion investment plan to bolster U.S. manufacturing, research, and technology capabilities by early 2029 [2][3]. As part of this capital allocation, the company revealed plans on Thursday to construct two new facilities: a cell therapy manufacturing site in Pennsylvania and a drug product manufacturing facility in North Carolina [2][8]. These projects are designed to reduce dependence on imported medicines, a requirement analysts suggest is necessary to sustain long-term price reductions [4].

Sources

Healthcare Policy Drug Pricing