Johnson & Johnson (J&J) became the latest bio/pharmaceutical company this week (January 8, 2026) to reach a deal with the US government over US drug pricing and tariffs amid increasing US-based capital investment. J&J reached a voluntary joint agreement with the Trump Administration to take action to align its drug pricing with the Administration’s policy goal of most-favored-nation drug pricing in return for the company’s pharmaceuticals products receiving an exemption from certain US-based tariffs, the specific terms of which were kept confidential. Also, the company re-emphasized its previously announced $55-billion capital investment to support US-based manufacturing, research and development, and technology investments by early 2029.

The premise behind the Administration’s policy goal of most-favored-nation drug pricing is that the US pays higher prescription drug costs comparative to other developed countries and therefore assumes a larger share of the costs of drugs and that measures should be taken to reduce the differential in the prices of prescription drugs in the US compared to other developed countries, where prescription drug prices are lower.

Last July (July 2025), the Trump Administration sent letters to certain bio/pharmaceutical companies to outline the steps they must take to be in alignment with most-favored-nation drug pricing following the issuance of an Executive Order last May (May 2025) in which the Administration was seeking voluntary compliance with most-favored-nation drug pricing. In addition to J&J, letters were sent to AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Roche’s Genentech, Gilead Sciences, GSK, Merck & Co., Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi. Since then, the Trump Administration has struck individual deals with bio/pharmaceutical companies, which depending on the company, included specific measures on drug pricing, certain tariff exemptions, and a commitment by these companies for US-based capital investment. Pfizer, AstraZeneca, Eli Lilly and Company, and Novo Nordisk were among the first companies in 2025 to reach individual agreements. Late last month (December 19, 2025), the Administration announced that it had reached deals with an additional nine companies: Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Roche’s Genentech, Gilead Sciences, GSK, Merck & Co., Novartis, and Sanofi.

J&J reaches agreement
Under its deal with the US government with regard to drug pricing, J&J announced that it will be participating in TrumpRx.gov, a direct-to-patient platform, which allows US-based patients to purchase medicines from the company at discounted rates. Without disclosing specifc pricing measures, the agreement includes most favored nation drug pricing measures, meaning the company’s drug pricing will be at comparable prices to other developed countries and will provide Medicaid program access at comparable prices to other developed countries. Medicaid is the US government healthcare program for low-income individuals.

As part of its $55-billion US investment plan, J&J announced this week (January 8, 2026), two new US. manufacturing facilities, including a cell-therapy manufacturing site in Pennsylvania and a drug-product manufacturing facility in North Carolina.

Additionally, the company reported that construction is progressing on its $2-billion biologics manufacturing facility in Wilson, North Carolina, which the company broke ground on last year (2025). That project will create approximately 5,000 skilled manufacturing and construction jobs in the state. The company is also ramping up the hiring of advanced manufacturing employees to work at the facility.

Last September (September 2025), J&J also secured a new 160,000+ square foot dedicated biopharmaceutical manufacturing site in Holly Springs, North Carolina. The $2-billion commitment over the next 10 years will create approximately 120 new jobs in North Carolina. The company says it expects to announce additional US investments later this year (2026).

Other company deals
Late last month (December 19, 2025), the White House outlined key terms of the agreements that the Administration had reached with the additional nine companies (Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Roche’s Genentech, Gilead Sciences, GSK, Merck, Novartis, and Sanofi). Overall, as reported by the White House, the agreements provide every State Medicaid program in the US access to most-favored-nation drug prices on products made by the nine companies. The agreements require the nine companies to repatriate increased foreign revenue on existing products that they realize as a result of what the White House terms as its “America First US trade policies for the benefit of American patients.” The agreements also require the nine companies to offer medicines at a discount off the list price when selling directly to US-based patients through TrumpRx, a direct-to-patient platform. In addition, the nine bio/pharmaceutical companies have collectively agreed to invest at least $150 billion in US-based manufacturing in the near term. Additionally, as part of the agreements, several companies are donating active pharmaceutical ingredients for key products to the Strategic Active Pharmaceutical Ingredients Reserve (SAPIR), a US national stockpile, to reduce reliance on foreign nations and ensure the US has an adequate supply of such products in the event of an emergency.

In return, similar to earlier announced individual company deals, these nine companies are receiving a three-year exemption on potential Section 232 US tariffs, which refer to potential pharmaceutical industry-specific tariffs. Section 232 of the Trade Expansion Act of 1962, as amended allows the President to impose import restrictions based on an investigation and affirmative determination by the US Department of Commerce that certain imports threaten to impair US national security. That investigation was initiated last April (April 2025) with the Administration throughout 2025 saying it was considering pharmaceutical industry specific tariffs—but to date (as of January 8, 2026), no such tariffs have been imposed on the industry as a whole.

Source: The White House, Johnson & Johnson, GSK, Merck & Co., Amgen, Bristol-Myers Squibb, Boehringer Ingelheim, Roche’s Genentech, Gilead Sciences, Novartis, and Sanofi.