Regeneron Secures Tariff Exemptions via White House Drug Pricing Agreement

Regeneron has entered into a pricing agreement with the White House, committing to reduce costs for certain medications and provide its newly approved gene therapy, Otarmeni, free of charge to eligible U.S. patients. The announcement follows the FDA's approval of the therapy earlier Thursday. The move is part of the administration's 'most favored nation' initiative, which seeks to align U.S. pharmaceutical pricing with the lowest rates found in other developed countries. According to CMS deputy administrator Chris Klomp, this marks the 17th such agreement reached between the administration and major drugmakers, with further negotiations ongoing. In exchange for these pricing concessions, Regeneron will be exempt from pharmaceutical tariffs for the next three years. This provides a significant financial buffer against planned levies that could have reached as high as 100% on certain pharmaceutical products. The deal coincides with the FDA's expedited approval of Otarmeni, a gene therapy targeting an ultra-rare genetic mutation that prevents the body from producing a protein required for hearing. The treatment, which received approval under the National Priority Voucher program, is intended for a subset of patients who previously relied on cochlear implants. From a financial perspective, the impact of the free-tier offering is balanced against the tariff savings. Prior to the deal, analysts at Piper Sandler had estimated that the gene therapy could reach peak sales of $130 million.