Analysis
Bristol Myers Squibb has successfully mitigated the direct impact of the 2025 U.S. tariffs—frequently referred to as reciprocal or Trump tariffs—by entering into a landmark "U.S. Government Agreement" in December 2025. While pharmaceuticals were largely exempt from the initial tariffs imposed in early 2025, the company spent much of the year evaluating potential risks and mobilizing cross-functional teams to address the evolving trade policy landscape. The resulting agreement provides Bristol Myers Squibb with three years of tariff relief until January 2029 and guarantees that the company will not be subject to future pricing mandates in the U.S. during this period.
The cost of this mitigation is primarily reflected in significant pricing and supply commitments that will weigh on revenue starting in 2026. Most notably, the company agreed to provide Eliquis, its top-selling anticoagulant, for free to the Medicaid program effective January 1, 2026. Based on historical utilization and the company's total U.S. Eliquis revenue of $10.2 billion in 2025, this commitment is estimated to represent a revenue headwind of approximately $1.0 billion annually. Additionally, Bristol Myers Squibb agreed to donate more than seven tons of Eliquis active pharmaceutical ingredient (API) to the U.S. Strategic Active Ingredient Reserve and to enable direct-to-patient access to five other major drugs—Sotyktu, Zeposia, Reyataz, Baraclude, and Orencia—at discounts of approximately 80% for cash-paying patients.
The agreement also mandates a "more balanced pricing approach" for new medicine launches across developed nations, effectively adopting a version of Most-Favored-Nation (MFN) pricing. While this limits future pricing flexibility, the company maintains that these actions improve patient access and affordability while securing its domestic supply chain. Management stated that the API donation and production expansion—part of a $40 billion U.S. investment commitment over five years—will not have a material impact on the overall business given the scale of the company's operations.
Looking ahead, the financial impact of these tariff-related commitments is factored into the company's 2026 revenue guidance of $46 billion to $47.5 billion. This range reflects the combined effect of the new pricing agreements and ongoing generic erosion from legacy products like Revlimid and Pomalyst. Despite these headwinds, Bristol Myers Squibb expects Eliquis to remain a driver of growth in 2026, supported by the removal of the Medicare Part D inflation penalty and continued demand growth, though a $1.5 billion to $2.0 billion step-down in sales is projected for 2027 due to international patent expirations.
Data
Estimated Annual Financial Impact of U.S. Government Agreement (Tariff Mitigation)
| Commitment Item | Estimated Annual Revenue Impact ($M) | Effective Date |
|---|---|---|
| Free Eliquis to Medicaid Program | ($1,000 – $1,200) | Jan 1, 2026 |
| 80% Discounts for Cash-Paying Patients (Sotyktu, Zeposia, Orencia, etc.) | ($200 – $300) | Jan 1, 2026 |
| Eliquis API Strategic Reserve Donation (7 tons) | Not Material | Dec 2025 |
| Total Estimated Net Tariff Impact (Mitigation Cost) | ($1,200 – $1,500) |
Source: Annual Report FY-2025, Transcript FY-2025, Marvin Labs estimates
Financial Impact
- Revenue Impact (Forward-Looking): $1.0B–$1.5B
Sources
In December 2025, we announced the U.S. Government Agreement pursuant to which we agreed to, among other things: (i) provide Eliquis for free to the Medicaid program effective January 1, 2026... In accordance with the U.S. Government Agreement, BMS will receive certain U.S. tariff relief until January 2029.
The specific terms of the agreement remain confidential... BMS will receive three years of tariff relief and will not be subject to future pricing mandates.
The roughly 40% WAC reduction [for Eliquis] eliminates the inflationary penalties or CPI penalties of statutory rebates that had been accumulating over many years for the brand... coupled with these net pricing changes, they're going to enable Eliquis to be an important driver of growth this year.