Trump Administration to Extend 'Most-Favored-Nation' Drug Pricing to All State Medicaid Programs, Semafor Reports

The Trump administration is preparing to announce the expansion of "most-favored-nation" pricing for certain prescription drugs to Medicaid programs in all 50 states, according to a report from Semafor. The move would represent a significant step in the administration's ongoing efforts to reduce U.S. drug costs, which are the highest among developed nations.

The Reported Plan

The announcement is expected to be made on Friday, Semafor reported, citing administration plans. President Trump is scheduled to host the governors of South Dakota, Mississippi, and Arkansas at the White House to promote the administration's initiatives on lowering drug prices.

Reuters noted that it could not immediately verify the report. According to the newswire, the White House and the U.S. Department of Health and Human Services did not immediately respond to a request for comment.

Context on Drug Pricing

The "most-favored-nation" model aims to ensure the U.S. government pays no more for certain drugs than the lowest price paid by other economically advanced countries. The policy directly addresses the significant price disparity where the U.S. often pays nearly three times as much as other developed nations for the same prescription medications.

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This initiative builds on previous agreements the administration signed with 17 major global drugmakers, including Pfizer (PFE), Eli Lilly (LLY), and Novo Nordisk (NVO), to secure lower prices.

Implications for Medicaid and Markets

Applying this pricing standard to Medicaid would have broad implications. Medicaid, the public health insurance program for low-income Americans, is funded jointly by federal and state governments and is one of the largest purchasers of prescription drugs in the country.

While Medicaid already receives steep, legally mandated discounts from pharmaceutical companies, this measure could impose further price reductions. The expansion of MFN pricing to a program of this scale could create significant revenue headwinds for pharmaceutical manufacturers whose products are widely used by Medicaid beneficiaries.