President announces 'most-favored-nation' drug pricing deals with nine pharmaceutical companies; the companies receive a three-year tariff reprieve in return.

OK. Friday morning at the White House. The President announced, with the CEOs of nine pharmaceutical companies in the room, most-favored-nation drug pricing deals. MFN in policy shorthand. The deal: the nine companies will price their Medicaid drugs to match the prices they charge in peer countries. The peer countries, in pharma pricing, pay considerably less than we do. By design.

Buddy. Some of the prices, in the press release, are real. Amgen will drop the price of Repatha, the cholesterol-lowering injectable, from $573 to $239 on direct purchases. That is a real drop. That is forty-two cents on the dollar. For the cardiac patient who has been paying that for a year, that is real money. I will say it.

Gilead will drop the price of Epclusa, the hepatitis C medication, from $24,920 to $2,425. That is, on the press release, the biggest cut on the page. Hepatitis C is, in this country, curable by Epclusa. The cost has historically been the wall. The wall, on Friday, came down by ninety percent.

Buddy. Now I want you to do the other side of the ledger. The cost of the deal, to the taxpayer, is a three-year tariff reprieve on pharmaceutical imports from these nine companies. The reprieve, on Treasury’s published tariff schedule, is worth several billion dollars per year per company. Multiplied by nine. Multiplied by three. Twenty-something billion in foregone tariff revenue.

The companies also committed, in the deal, to $150 billion in U.S. manufacturing and R&D investment over the next several years. The companies, for context, spend roughly $150 billion in U.S. manufacturing and R&D investment in every several-year period anyway. The press release counts the baseline spending as the deliverable. That is not a new deliverable. That is the running total of what they were already going to do.

So. On the deal. The patients with cardiac risk and hep C, on Medicaid, get a real price cut. Good. The companies get a three-year tariff shield worth multiple billions. The companies commit to investment they were already going to make. The Treasury foregoes tariff revenue. The patient wins on Repatha. The Treasury takes the haircut.

I have run a casino floor for thirty years. I have negotiated with the chip vendors, the soda vendors, the linen vendors, the security vendors, and the band. Every deal has a gimme and a take. The art is making sure the customer sees the gimme and not the take. On Friday at the White House, the gimme was on the lectern in nine-foot letters. The take was in paragraph fourteen of the white paper.

I am arguing with the television. The television, on Friday, is reading paragraph fourteen.