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Getting the latest healthcare news for you
Getting the latest healthcare news for you
Nine mid-sized pharmaceutical companies have agreed to White House deals linking certain Medicaid drug prices to the lowest rates paid by other countries, in exchange for tariff exemptions. The agreements fall under CMS's GENEROUS program and also include pledges to boost U.S. manufacturing. Analysts, however, say the deals are unlikely to meaningfully dent drugmaker profits, since Medicaid represents a small slice of most companies' revenues.
Nine mid-sized drugmakers — including Teva, UCB, Sun Pharma, and BridgeBio — have struck voluntary deals with the White House to align certain Medicaid drug prices with the lowest prices paid in other countries, a concept known as "most favored nation" (MFN) pricing. In return, the companies receive exemptions from Section 232 tariffs on pharmaceutical imports. Some manufacturers also pledged to extend MFN pricing to future drugs and expand U.S. manufacturing operations.
The agreements fall under CMS's GENEROUS program, launched in January and set to run for six years. Notably, the deals are limited to Medicaid and do not extend to commercial insurance or Medicare — the far larger federal drug program.
By the Numbers:
Why it matters: While the deals signal continued White House pressure on drug pricing, analysts at RBC Capital Markets don't expect any of the companies to face "meaningful commercial impact." Since Medicaid already mandates steep discounts under a 1990 law, the incremental savings remain unclear — and the exclusion of Medicare significantly limits the deals' broader reach.
