Drugmaker Pfizer has agreed to lower drug costs and invest $70 billion in U.S. manufacturing under a deal struck with the Trump administration, President Donald Trump said Tuesday.

The announcement, which Trump made with Pfizer CEO Albert Bourla at the White House, came as the Republican president has for months sought to lower drug costs.

The White House did not immediately release details about the investment, but Trump for months has spoken of a need to boost U.S. drug manufacturing.

Under the agreement, New York-based Pfizer will charge most-favored-nation pricing to Medicaid and guarantee that pricing on newly launched drugs, Trump said. That involves matching the lowest price offered in other developed nations.

“It’s going to have a huge impact on bringing Medicaid costs down like nothing else,” the president said.

“I can’t tell you how big this is," he added.

It’s unclear how the new policy will affect Medicaid patients who often pay a nominal co-payment of a few dollars to fill their prescriptions, but lower prices could help state budgets that fund the programs. Medicaid is the state and federally funded program for people with low incomes.

Besides committing to lowering costs, Trump said, Pfizer agreed to spend $70 billion in domestic manufacturing facilities. The White House did not immediately release details about the investment.

Pfizer Inc. is one of the largest U.S. drugmakers. It produces the COVID-19 vaccine Comirnaty and the treatment Paxlovid. Its products also include several cancer drugs, the blood thinner Eliquis and the pneumonia vaccine Prevnar.

Trump has been talking for months about the need to lower drug prices. He issued an executive order in May giving drugmakers 30 days to electively lower prices or face new limits on what the government will pay.

Health and Human Services Secretary Robert F. Kennedy Jr., who joined Trump, Bourla and others at the White House, applauded the president as he touted the deal.

“Americans should not be gouged paying 300 or 400 or 1,000% more than people in other countries for the exact same drug,” he said.

Trump has claimed that the U.S., with its higher drug prices, subsidizes care in other countries.

Drug prices for patients in the U.S. can depend on a number of factors, including the competition a treatment faces and insurance coverage.

Most people have coverage through work, the individual insurance market or government programs like Medicaid and Medicare that shields them from much of the cost.

As he announced a new partnership with Pfizer, Trump said other drug manufacturers will follow suit.

And if they don't, the president threatened to impose tariffs on those companies.

"Nobody wants to play that game. So they're all gonna be good," Trump said in response to a question from a reporter.

He said Pfizer was "right at the top," while the Indianapolis-based Eli Lilly "has been fantastic also." Other companies are coming to the White House next week and "we're making deals with all of them."