Johnson & Johnson (JNJ) reached a significant agreement with the Trump administration to lower drug prices for Americans while securing exemptions from U.S. tariffs. The deal highlights the company’s efforts to strike a balance between affordability for consumers and strategic business benefits.
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This deal follows the Trump administration’s similar drug-pricing agreements with other major pharmaceutical companies, including GSK (GSK), Merck (MRK), and Novartis (NVS).
More Details About the Deal
Johnson & Johnson said Thursday that its new agreement with the U.S. government meets the administration’s requests and provides tariff exemptions for its pharmaceutical products. Specific details, including which drugs are affected or the exact price cuts, were not disclosed.
Under the deal, J&J will participate in TrumpRx.gov, letting Americans buy its medicines at significantly discounted rates and will offer Medicaid access at prices similar to those in other developed nations.
Notably, U.S. patients often pay nearly three times more for prescription drugs than people in other developed countries, and the Trump administration has been pushing drugmakers to lower prices. Since taking office last year, President Trump has repeatedly pushed for lower drug prices and threatened higher tariffs on imported pharmaceuticals to pressure drugmakers. Last year, he imposed a 100% tariff on all pharmaceutical imports but granted exemptions for companies investing in U.S. manufacturing facilities.
JNJ’s Investment Plans
Johnson & Johnson also announced plans for two new U.S. manufacturing facilities as part of a $55 billion investment previously unveiled. Construction is underway on a $2 billion biologics plant in Wilson, N.C., which is expected to create around 5,000 skilled jobs. The company said it plans to announce further U.S. investments later this year.
Is JNJ a Good Stock to Buy?
According to TipRanks, JNJ stock has received a Moderate Buy consensus rating, with 13 Buys and six Holds assigned in the last three months. JNJ’s average stock price target is $219.05, suggesting a potential upside of 6.5% from the current level.
