Programmatically add product to cart with price change

After digging a bit into Magento’s core code, I found that you need to use $item->getProduct()->setIsSuperMode(true) in order to make $item->setCustomPrice() and $item->setOriginalPrice() work.

Here is some sample code you can use within an Observer that listens for the checkout_cart_product_add_after or checkout_cart_update_items_after events. The code is logically the same except checkout_cart_product_add_after is called for only one item and checkout_cart_update_items_after is called for all items in the cart. This code is separated/duplicated into 2 methods only as an example.

Event: checkout_cart_product_add_after

/**
 * @param Varien_Event_Observer $observer
 */
public function applyDiscount(Varien_Event_Observer $observer)
{
    /* @var $item Mage_Sales_Model_Quote_Item */
    $item = $observer->getQuoteItem();
    if ($item->getParentItem()) {
        $item = $item->getParentItem();
    }

    // Discounted 25% off
    $percentDiscount = 0.25; 

    // This makes sure the discount isn't applied over and over when refreshing
    $specialPrice = $item->getOriginalPrice() - ($item->getOriginalPrice() * $percentDiscount);

    // Make sure we don't have a negative
    if ($specialPrice > 0) {
        $item->setCustomPrice($specialPrice);
        $item->setOriginalCustomPrice($specialPrice);
        $item->getProduct()->setIsSuperMode(true);
    }
}

Event: checkout_cart_update_items_after

/**
 * @param Varien_Event_Observer $observer
 */
public function applyDiscounts(Varien_Event_Observer $observer)
{
    foreach ($observer->getCart()->getQuote()->getAllVisibleItems() as $item /* @var $item Mage_Sales_Model_Quote_Item */) {
         if ($item->getParentItem()) {
             $item = $item->getParentItem();
         }

         // Discounted 25% off
         $percentDiscount = 0.25; 

         // This makes sure the discount isn't applied over and over when refreshing
         $specialPrice = $item->getOriginalPrice() - ($item->getOriginalPrice() * $percentDiscount);

         // Make sure we don't have a negative
         if ($specialPrice > 0) {
             $item->setCustomPrice($specialPrice);
             $item->setOriginalCustomPrice($specialPrice);
             $item->getProduct()->setIsSuperMode(true);
         }
    }
}