WASHINGTON (AP) — President Donald Trump announced Friday that all 50 states will join in on a program set to provide Most Favored Nation pricing to some drugs within the Medicaid program, bringing the net price of selected drugs down to prices paid in certain other countries.
The Trump administration claims that Medicaid will save billions on prescription drug costs as a result of the plan, dubbed the Medicaid “GENEROUS” model. Experts say the savings are unclear since the content of the deals isn’t public.
“This one thing alone should win us the midterms,” Trump told reporters in the Oval Office Friday, flanked by Health and Human Services Secretary Robert F. Kennedy Jr., Centers for Medicare & Medicaid Services Administrator Mehmet Oz and others.
Friday’s announcement comes as cost-of-living issues are at the forefront of voters’ concerns ahead of the midterm elections in November. In a way to address affordability concerns, Trump has cut deals with pharmaceutical companies so that the cost of some drugs in the U.S. would not be dramatically higher than in other affluent nations. But critics say his administration has not presented a viable plan for broadly addressing rising health costs, especially after Republicans let expire Affordable Care Act subsidies earlier this year that sent plan costs soaring.
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Last year, Trump signed an executive order instituting a “Most Favored Nations” policy, where the U.S. would commit to paying the same price for medications as the nation that pays the lowest price anywhere in the world.
The White House in May estimated that Trump’s deals with pharmaceutical companies to lower some of their U.S. prescription drug prices to levels charged in other countries could save $529 billion over the next 10 years.
Patients in Medicaid, the state and federally funded program for people with low incomes, already pay a nominal co-payment of a few dollars to fill their prescriptions, but lower prices could help state budgets that fund the programs.
Trump said, “Every state will have the ability to use those extra billions of dollars to invest in other healthcare improvements or something else.”
The true cost of the claimed savings is unclear since few details of the deals struck by the Trump administration and participating pharmaceutical companies have been made public, making it hard to independently verify the projected savings.
Kush Desai, a White House spokesman, pointed to drug deals negotiated during former President Joe Biden’s term under the Inflation Reduction Act that did not include commercially sensitive information and said experts “now poking holes at the Trump administration for also not wanting to disclose commercially sensitive information should be regarded as either an idiot or partisan hack.”
Kathy Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, told The Associated Press that there is significant pressure on the administration to provide more granular data to justify its cost-savings claims, and that the lack of information creates a barrier to legislative action.
“He is saying Congress should codify all of his MFN arrangements,” Hempstead said. “But it’s kind of unreasonable because it’s not clear what Congress would actually do. No one knows what is in these deals.”
She added that there is concern about whether the current administration’s tenure will affect the longevity of these price cuts and whether prices will revert once the administration leaves.
Some want to see more people benefit from lower drug pricing.
JD Hayworth, a former Republican congressman and spokesperson for the Pharmaceutical Reform Alliance, said in a statement that Friday’s announcement reflects “meaningful progress, but that progress remains incomplete,” as millions of Americans not enrolled in government healthcare want lower drug prices.
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, which shield them from much of the cost.