What are drug pricing deals and how do they work?

Drug pricing deals are voluntary agreements between pharmaceutical companies and the US government. Companies agree to lower the prices of their medicines for American consumers in exchange for exemptions from tariffs on imported pharmaceutical products. This helps reduce healthcare costs whilst encouraging domestic production.

What does onshoring mean in pharmaceuticals?

Onshoring refers to bringing pharmaceutical manufacturing and supply chain operations back to the United States from overseas locations. This trend is driven by government incentives, national security considerations, and policies designed to reduce dependence on foreign drug production.

Why are these companies positioned to benefit from this trend?

These companies fall into two key categories: major pharmaceutical firms that are directly involved in pricing negotiations and benefit from government incentives, and domestic manufacturers that provide essential services like contract manufacturing, logistics, and specialised components needed for expanded US-based pharmaceutical production.

What does 'Potential Profit %' mean on stock cards?

Potential Profit % represents the projected percentage return over a 12-month period based on aggregated analyst sentiment and price targets. This figure is provided by Refinitive Ltd and gives you an idea of what professional analysts expect the stock might return, though actual performance may vary.

What role do government incentives play in this investment theme?

Government incentives include tariff exemptions for companies that agree to lower drug prices, as well as broader policies encouraging domestic manufacturing. These incentives are designed to reduce healthcare costs, improve supply chain security, and create jobs in the US pharmaceutical sector.

14 handpicked stocks

Drug Pricing Deals Drive US Manufacturing in 2025

Johnson & Johnson secured a deal with the U.S. government to lower drug prices in exchange for tariff exemptions, expanding on a major policy trend. This theme identifies opportunities among pharmaceutical companies and domestic manufacturers benefiting from government incentives to onshore production.

Han Tan | Market Analyst

Published on January 9

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Eli Lilly and Company

LLY

Current price

$989.12

As a leading global pharmaceutical company with a significant manufacturing and research presence in the US, Eli Lilly is central to government drug p...

As a leading global pharmaceutical company with a significant manufacturing and research presence in the US, Eli Lilly is central to government drug pricing negotiations and domestic production incentives.

McKesson Corporation

MCK

Current price

$943.25

McKesson is a primary distributor of pharmaceuticals in the United States, making it a critical component of the domestic supply chain influenced by g...

McKesson is a primary distributor of pharmaceuticals in the United States, making it a critical component of the domestic supply chain influenced by government pricing agreements.

Bristol-Myers Squibb Co.

BMY

Current price

$59.71

Bristol-Myers Squibb is a major biopharmaceutical company with substantial US operations, positioning it as a key participant in federal drug pricing ...

Bristol-Myers Squibb is a major biopharmaceutical company with substantial US operations, positioning it as a key participant in federal drug pricing discussions and onshoring initiatives.

GSK PLC-SPON ADR.

GSK

Current price

$53.77

Cardinal Health, Inc.

CAH

Current price

$217.59

Becton, Dickinson and Company

BDX

Current price

$160.27

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Your Basket's Financial Footprint

This basket's total market capitalisation is 1,481,736.7483 and is heavily anchored by a small number of very large-cap stocks. That concentration tends to give the basket a large-cap profile with lower expected volatility and more market-like behaviour.

Key Takeaways for Investors:

Large-cap dominance generally implies lower volatility and closer tracking of broad markets, suggesting relatively stable performance and reduced tail risk.
Use as a core holding for diversified portfolios; not ideal for short-term speculative positions.
Expect steady, long-term value accumulation rather than rapid, explosive gains; growth tends to be gradual.

Total Market Cap

LLY: $1.03T
MCK: $100.55B
BMY: $113.80B
Other

12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

≈

In 12 months it might be worth:

$1,000.00

+37.40%

≈

About This Group of Stocks

Our Expert Thinking

The US government is striking deals with major pharmaceutical companies, offering tariff exemptions in exchange for lower drug prices. This policy shift creates significant opportunities for companies involved in domestic pharmaceutical manufacturing and supply chains, as billions in investment flows toward onshoring critical healthcare production.

What You Need to Know

This collection includes two key types of companies: established pharmaceutical giants navigating new pricing agreements, and domestic manufacturers positioned to benefit from reshoring efforts. The trend spans contract manufacturing, logistics, medical devices, and specialised healthcare components essential for expanding US-based production.

Why These Stocks

Each company was handpicked based on their strategic positioning within this evolving landscape. From major pharmaceutical players like Eli Lilly and Bristol-Myers Squibb to specialised manufacturers like West Pharmaceutical Services, these stocks represent direct exposure to government incentives driving healthcare manufacturing back to American shores.

Group Performance Snapshot

37.4%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 37.4% over the next year.

12 of 14

Stocks Rated Buy by Analysts

12 of 14 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

🏛️

Policy-Driven Opportunity

Government incentives are reshaping the pharmaceutical landscape, creating clear winners amongst companies positioned for domestic manufacturing growth.

💰

Billions in New Investment

Major drug makers are committing multi-billion dollar investments to US-based production, driving demand for specialised manufacturing and supply chain partners.

🔄

Supply Chain Revolution

The shift from overseas to domestic pharmaceutical manufacturing represents one of the most significant structural changes in healthcare in decades.

Get the full story on this Basket. Read our detailed article on its risks and potential.

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Drug Pricing Deals Drive US Manufacturing in 2025

Top Picks from This Group

Your Basket's Financial Footprint

12 Month Growth Potential

About This Group of Stocks

Our Expert Thinking

What You Need to Know

Why These Stocks