Drugmakers Buoyed as Trump Deal Eases Worst Fears on Pricing (1)

Wall Street had long feared US President Donald Trump would follow through with threats to impose aggressive drug-pricing policies, eroding the pharmaceutical industry’s profitability and depressing share prices.

Those fears were largely laid to rest this week after Pfizer Inc. cut a deal with the White House.

The company led the pack on Tuesday, negotiating a three-year reprieve on drug-import tariffs in exchange for a promise to reduce what it charges Medicaid. The government insurance program for low-income people accounts for a small fraction of Pfizer’s business and already gets steep discounts from drugmakers.

Pfizer also promised to price future ...