White House economists have reportedly estimated that the agreements President Donald Trump has made with pharmaceutical companies to reduce U.S. prescription drug prices could lead to savings of $529 billion over the next decade.
The analysis was carried out by administration officials for the White House Council of Economic Advisers. They also estimated that the federal and state governments could collectively save $64.3 billion on Medicaid over the next decade due to Trump’s “most favored nation” policy on drug prices, reported the Associated Press on Tuesday.
According to the publication, this analysis is the first comprehensive projection of a policy that is central to Trump’s appeal to voters in the upcoming midterm elections.
The White House analysis also estimated that expanding Trump’s drug pricing framework could save up to $733 billion over a decade as more medications enter the market.
White House did not immediately respond to Benzinga‘s request for comments.
MFN Deals, Tariffs Pressure Drugmakers
The “Most Favored Nation” (MFN) policy ties U.S. prices to those in other high-income countries.
Most major drugmakers have struck deals to avoid the tariffs. Pfizer Inc. (NYSE:PFE), Eli Lilly and Co. (NYSE:LLY), AstraZeneca PLC (NYSE:AZN), Novo Nordisk (NYSE:NVO), and Johnson & Johnson (NYSE:JNJ) secured three-year reprieves as part of the deal. J&J also pledged a $55 billion U.S. investment, including two new manufacturing plants.
In early April, the Trump administration prepared to announce 100% tariffs on pharmaceutical companies that had not.
However, Vas Narasimhan, CEO of Novartis (NYSE:NVS), which has also signed the deal, warned that Trump’s drug pricing policy could force tough trade-offs for drugmakers and patients, with major impacts expected within the next 18 months and significant long-term consequences.
Drug Pricing Deals Draw Scrutiny
The Trump administration and HHS have promoted their drug-pricing deals as major reforms and want Congress to formalize them. However, the details of the agreements with 17 major drugmakers remain undisclosed, attracting scrutiny from lawmakers.
Led by Senate Finance Committee Ranking Member Ron Wyden (D-Ore), they’ve pushed for legislation requiring full disclosure of the agreements, questioning the lack of transparency. Health Secretary Robert F. Kennedy Jr. said some details would be shared, excluding proprietary information.
Meanwhile, Sen. Elizabeth Warren (D-Mass.) has also called out Trump over his claims that TrumpRx, launched in February, is lowering drug costs by 600%, terming it “mathematically impossible.”
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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