President Trump says 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.
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.
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.
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.