Politics
Trump administration targets drug costs with reported voluntary pricing agreements
Nearly a dozen pharmaceutical companies are expected to offer state Medicaid programs outpatient drug discounts linked to lower foreign prices.
The short version
- President Donald Trump is reported to announce new voluntary drug pricing agreements with nearly a dozen pharmaceutical companies.
- Participating drugmakers are expected to offer state Medicaid programs discounts on outpatient drugs matching foreign rates in exchange for exemptions from mandatory Medicare discount pilot programs.
- State participation in the new Medicaid discount framework will be optional.
- The specific companies involved and the direct impact on patient out-of-pocket costs remain unclear.
Key facts
- President Donald Trump signed an executive order in May 2025 reviving the 'most favored nation' policy to align domestic drug prices with lower rates paid overseas.[CNBC]
- The administration has previously signed drug pricing deals with 17 pharmaceutical companies, including Pfizer, Eli Lilly, and Novo Nordisk.[CNBC]
- Under the reported terms, drugmakers providing Medicaid discounts matching foreign prices would receive exemptions from mandatory Medicare discount pilot programs.[CNBC]
- A 2024 Rand Corp. study found that average U.S. prescription drug prices were nearly three times higher than those in other countries, with brand-name drug prices over four times higher.[CNBC]