Trump announces cheaper drugs for state Medicaid programs
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All 50 states are in line to get "most favored nation" prices for certain Medicaid drugs under an arrangement projected to save state governments $27.6 billion, President Trump announced on Friday.
Why it matters: It's the latest extension of Trump's drug pricing deals with major manufacturers, which the president is touting as one of his signature health care accomplishments ahead of the midterm elections.
- But it's hard to know whether the savings will be realized, since many details about the pricing deals remain confidential.
Driving the news: The White House said participating pharmaceutical companies will provide state Medicaid programs with rebates on selected brand-name drugs to ensure the final price to Medicaid does not exceed what's paid in other developed countries.
- The agreement includes hundreds of drugs across major drug classes, including treatments for oncology, diabetes care, and asthma.
- Because Medicaid costs are shared between states and the federal government, the Council of Economic Advisers estimates $36.6 billion in federal savings, along with the savings to the states, from the arrangement.
- "Medicaid programs will get the best possible price for drugs, delivering better value for taxpayers and freeing up funds to give vulnerable Americans the high-quality care they deserve," said Centers for Medicare and Medicaid Services Administrator Mehmet Oz.
Context: Trump has struck deals with more than two dozen large and midsize manufacturers that call for Medicaid price concessions and agreements to launch future drugs in the U.S. at prices pegged to what's paid abroad.
- Medicaid spending on prescription drugs has grown significantly in recent years, partly due to the emergence of GLP-1s and other pricey medicines, including cell and gene therapies, per KFF.
- While lower prices to state Medicaid programs could reduce costs and potentially expand coverage of certain drugs, the extent of the savings and how states or manufacturers will respond remain unclear, KFF said.
The other side: Critics say there's still little evidence that drug companies are following through on their commitments to lower U.S. launch prices.
- Public Citizen said Friday's announcement was "a charade," saying drug companies and Trump appear to have worked together to offer minor concessions to avoid taking more meaningful action to lower prices.
- "The Trump administration continues to obscure key details about its Medicaid deals, including the number of drugs subject to price concessions and the true level of price reductions, which will only be in place through the end of his term," said Peter Maybarduk, Access to Medicines director for Public Citizen.
