Trump’s new pharma deals lower Medicaid prices but shield Medicare from cuts

Washington officials announced new voluntary pricing agreements with several midsize biotechnology companies. The deals require the firms to reduce the prices they charge under Medicaid, the program that already receives the lowest statutory drug prices.

In return, the companies are exempted from any mandatory price cuts in Medicare. The arrangement, described as a most-favored-nation agreement, is intended to align U.S. payer prices with those of peer nations.

Analysts say the impact may be modest because the concessions apply only to Medicaid, while Medicare prices remain untouched. They warn the approach could limit broader efforts to curb overall drug spending.

The agreements are being highlighted by the administration as a political win ahead of upcoming elections, but critics argue they may undercut longer-term strategies to lower drug costs across the health-care system.