In brief
President Donald Trump revealed that nine prominent drugmakers have agreed to lower prescription drug prices in the U.S., matching prices with those in other developed countries. The deal includes adjustments for both new and existing medications, and highlights efforts to improve healthcare affordability for Medicaid and uninsured patients. Economists suggest this may enhance health equity while drug companies commit to emergency supplies and donations for critical medications.
U.S. President Donald Trump announced Friday that nine drugmakers have agreed to lower the cost of their prescription drugs in the U.S.
Pharmaceutical companies Amgen, Bristol Myers Squibb, Boehringer Ingelheim, Genentech, Gilead Sciences, GSK, Merck, Novartis, and Sanofi will now rein in Medicaid drug prices to match what they charged in other developed countries.
As part of the deal, new drugs made by those companies will also be charged at the so-called “most-favored-nation” pricing across the country on any newly launched medications for all, including commercial and cash pay markets as well as Medicare and Medicaid.
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.
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.
Lower drug prices also will help patients who have no insurance coverage and little leverage to negotiate better deals on what they pay. But even steep discounts of 50% found through the administration’s website could still leave patients paying hundreds of dollars a month for some prescriptions.
William Padula, a pharmaceutical and health economics professor at USC, stated that Medicaid already has the most favorable drug rates which in some cases will be close to what the “most-favored-nation” price is so it remains to be seen what other impacts it could have, such as more research and development.
It’s noteworthy that Trump managed to get major drugmakers to negotiate lower prices, but it may take years to gauge the effectiveness of this initiative in terms of improving access to needed medications.
Additionally, the drugmakers will offer pharmacy-ready medicines via the TrumpRx platform, expected to launch in January, enabling consumers to buy drugs directly from manufacturers.
Moreover, companies including Merck, GSK, and Bristol Myers Squibb have pledged to donate significant supplies of key active pharmaceutical ingredients to a national reserve, ensuring availability during emergencies.
Notably, Bristol Myers Squibb has announced that it will provide free its top prescribed blood thinner, Eliquis, to the Medicaid program, thus enhancing access to vital medications for those in need.
The recent agreements expand on earlier arrangements, with 14 companies now negotiating lower prices with the administration after Trump reached out to 17 pharmaceutical executives, citing that U.S. prices for brand-name drugs can be up to three times higher than in other countries.
Trump indicated his administration leveraged the threat of 10% tariffs to compel pharmaceutical companies to take action.
