J&J Strikes Drug Pricing Deal With Trump, Gets Tariff Reprieve

Johnson & Johnson JNJ recently signed a landmark agreement with the Trump administration to lower drug prices in the United States.

Following this deal, JNJ joins several other large-cap pharma companies that signed similar deals with the government in 2025. These companies include Amgen, Bristol Myers, privately-held Boehringer Ingelheim, Genentech (a member of the Roche Group), Gilead Sciences, GSK plc, Merck, Novartis, Sanofi, Pfizer, AstraZeneca AZN, Eli Lilly LLY, Novo Nordisk and Merck KGaA.

Under the agreement, J&J has agreed to reduce the prices of its prescription drugs to match those in comparable developed countries, supporting President Trump’s Most Favored Nation (MFN) pricing proposal. The company’s products will be available at significant discounts through direct-to-consumer channels and on TrumpRx.gov, a federal purchasing platform that is expected to go live soon.

In return, J&J will receive a limited-period exemption from import tariffs on pharmaceutical ingredients, contingent upon expanding its domestic manufacturing operations. With the latest announcement, the Trump administration has now reached deals with 15 out of 17 large drug manufacturers that were called out in July 2025 to lower drug prices in the country. The remaining two companies — AbbVie ABBV and Regeneron — are yet to sign similar deals and remain in active discussions with the government.

In the past six months, shares of J&J have rallied 30.6% compared with the industry’s 20.4% growth.

In this regard, JNJ is advancing its previously announced $55 billion investment plan to expand U.S. manufacturing, research, and technology capabilities by early 2029. Over the past 10 months, the company has already committed billions of dollars to new U.S. manufacturing capacity, supporting its strategy to produce most of its advanced medicines domestically, thereby better serving U.S. patients and strengthening supply chain resilience.

As part of this initiative, J&J is building two new U.S. manufacturing facilities — a next-generation cell therapy site in Pennsylvania and a state-of-the-art drug product facility in North Carolina. Construction is also underway on a $2 billion biologics manufacturing plant in Wilson, NC, which is expected to create approximately 5,000 manufacturing and construction jobs, with hiring already in progress. Additionally, J&J secured a 160,000+ square foot biopharmaceutical manufacturing site in Holly Springs, North Carolina, backed by a $2 billion, 10-year investment plan that is expected to generate about 120 new jobs. The company will announce further U.S. investments expected later this year.

Johnson & Johnson Price and Consensus

Johnson & Johnson price-consensus-chart | Johnson & Johnson Quote

Other Large-Caps Step Up US Investments Amid Policy Shift

Like J&J, other large-cap pharma companies have also committed billions of dollars in 2025 toward U.S.-based manufacturing and R&D investments. Some of these are discussed below.

AstraZeneca has committed to investing $50 billion by 2030 to strengthen its U.S. research and production footprint. As part of its investment plan, AZN ‘broke ground’ on a new $4.5 billion manufacturing facility in Virginia last year — its largest single investment in a facility to date. This new facility will focus on producing drug substances for the company’s weight management and metabolic therapies, as well as its leading antibody drug conjugate cancer drugs. Subsequently, AstraZeneca also announced a $2 billion investment to expand its manufacturing footprint in Maryland, which is expected to create 2,600 jobs.

In September 2025, AbbVie announced plans to invest more than $10 billion by 2035. As part of this plan, ABBV had announced a $70 million investment to increase the bioresearch and manufacturing capabilities at its Worcester, MA, facility. This new facility will boost domestic biologics manufacturing capacity to meet increased global demand and support U.S. production of current and next-generation oncology and immunology medicines.

In February 2025, Lilly also announced plans to invest $27 billion to develop four new manufacturing sites in the United States. This brings its total domestic manufacturing expansion commitments since 2020 to more than $50 billion. The increased manufacturing investment is expected to enhance production capacity for LLY’s marketed drugs, specifically its popular GLP-1 products, Mounjaro and Zepbound. Lilly recently announced the third of the four new facilities to be developed, which will be used to manufacture orforglipron, its first oral, small molecule GLP-1 RA for obesity. A regulatory filing seeking its approval is currently being reviewed by the FDA.

JNJ’s Zacks Rank

J&J has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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