The Trump administration on Monday announced new Medicaid drug pricing agreements with nine midsize biotechnology and pharmaceutical companies, expanding its most-favored-nation pricing initiative. President Trump, flanked by company executives in the Oval Office, said the deals ensure that every covered drug “will be at the lowest prices available anywhere in the world.”
Details of the agreements
Under the agreements, the companies will charge state Medicaid programs the same prices they charge foreign governments for certain outpatient drugs. In return, the companies are exempt from similar most-favored-nation pricing programs in Medicare and receive protection from pharmaceutical tariffs.
The White House identified the nine participants as Alcon, Astellas Pharma, BeOne Medicines, BridgeBio, CSL, Kyowa Kirin, Sun Pharma, Teva Pharmaceuticals, and UCB. These firms join 17 others that had already signed on, bringing the total to 26 companies, including major players like Pfizer, Merck, and Eli Lilly.
According to the White House, the agreements cover drugs for hemophilia, Parkinson’s disease, macular degeneration, glaucoma, liver disease, skin conditions, and several cancers. The companies also committed to investing at least $19.6 billion collectively in U.S. manufacturing.
Political context and criticism
President Trump claimed that the participating companies represent about 90 percent of the branded drug market. “The other 10 percent are coming in — they have no choice,” he said.
The administration has been eager to highlight these pricing deals as part of its focus on affordability ahead of the November midterm elections. However, the actual impact remains unclear. The White House projects that the deals could save $64.3 billion in federal and state spending over the next decade, but that figure is speculative. Moreover, the agreements do not address costs for the more than 160 million Americans with employer-sponsored insurance.
Trump argued that the U.S. has long overpaid for medications compared to other developed nations. “We were ripped off by the pharmaceutical companies, and we were ripped off more than anything by other countries throughout the world,” he said Monday.
Critics, including congressional Democrats, dismiss the agreements as all flash with no substance. They point out that the details are largely confidential, making it impossible to verify savings. The White House has pushed Congress to codify the policy but has not disclosed key terms to lawmakers.
Notably, no drugs have yet been launched in the U.S. under these most-favored-nation agreements. Analysts suggest that the impact on Medicaid patients could be negligible, as the program already guarantees the lowest price offered to any commercial payer.
As the administration continues to tout its midterm-focused affordability agenda, the political stakes are rising, with Republicans facing potential blowback over trade policies. The secretive nature of these deals may become a liability, as lawmakers demand more transparency.
