Small and Mid-Size Pharma Reluctant to Participate, Hindering Trump's Lowest Drug Price Plan
Miles Bennett
Trump's "most-favored-nation pricing" Medicaid pilot has signed up 17 large drugmakers covering ~86% of U.S. brand-drug sales — but smaller firms are broadly refusing to join, capping its reach and putting the projected $64.3 billion in savings at risk.
What is this pilot trying to do?
The idea: peg U.S. Medicaid drug prices to what other developed countries pay — so-called "most-favored-nation pricing."
The White House says the 17 signees account for ~86% of U.S. brand-drug sales and could save federal and state governments $64.3 billion over a decade.
This means → the big-pharma footprint looks broad, but roughly half the projected savings depend on states opting in — and states have until September to decide.
Why are smaller drugmakers staying away?
Ionis Pharmaceuticals CEO Brett Monia told Reuters plainly: "We don't see upside in reaching a deal."
In plain terms = smaller firms have narrow product lines, so a price cut hits profit directly. Large drugmakers can offset losses across dozens of products; small ones cannot.
Four industry lobbyists said mid-size firms see "no real upside" and will "most likely steer clear" of any voluntary scheme that limits pricing autonomy.
The application window was extended twice — what happened?
CMS pushed the deadline from March 31 to June 11, extending it twice.
Of 19 mid-tier drugmakers contacted by Reuters, only Japan's Astellas confirmed it applied. Germany's Bayer and Japan's Daiichi Sankyo said they were still evaluating; the other 15 declined to comment or did not respond.
This reflects a structural reluctance, not a timing problem — more time did not change minds.
Is the $64.3 billion savings figure realistic?
About half the projected savings come from the state level, yet states have not committed.
Analysts note that Medicaid discounts already exceed 80% off list price, in some cases matching what other developed nations pay.
This means → the additional room "most-favored-nation pricing" can squeeze out may be slim — the bulk of the discount is already baked in, leaving only a marginal further cut.
Why does this matter?
Large drugmakers cover 86% of sales, but smaller firms develop most innovative new drugs.
In plain terms = if the policy only reaches big companies' mature portfolios while excluding the firms actually creating new medicines, it is unlikely to reshape America's drug-pricing structure.
The broad absence of smaller drugmakers is the key variable in whether this policy delivers on its promise.
Content is for reference only, not financial advice.