WASHINGTON – The Trump administration quietly secured agreements with several pharmaceutical companies to lower drug prices for Medicare beneficiaries, a move that mirrors and, in some cases, exceeds the price reductions achieved through the Inflation Reduction Act (IRA) negotiated by the Biden administration. Novo Nordisk and Eli Lilly are among the companies that reached deals with the Trump administration to voluntarily lower prices on certain medications, including those for diabetes and obesity.
A Novo Nordisk spokesperson stated the company “look[s] forward to additional clarity from CMS on how pricing and coverage will work together to support patient access as details are finalized.” Eli Lilly expressed a preference for the earlier voluntary deals over the IRA negotiations, characterizing the latter as “not a negotiation but a government price setting process that dose nothing to increase affordability for seniors while hindering innovation.”
Details surrounding the timing and duration of these voluntary price reductions remain unclear. Spokespeople for both Novo Nordisk and Eli Lilly declined to comment on discrepancies between the IRA-negotiated prices and those announced under the Trump administration’s agreements, the longevity of the voluntary lowered prices, or the impact of the IRA negotiations on the confidential earlier deals.
Health economics professor Sean Sullivan of the University of Washington questioned the sustainability of the agreements reached under the Trump administration, stating, “I don’t know how sustainable [MFN] is… If they were serious about MFN, they would put it in law, instead of one-off press releases.”
The developments come as Trump continues to navigate resistance within his own party regarding his healthcare proposals. Earlier this year, proposals to include drug pricing measures in a Republican reconciliation package were rejected by GOP lawmakers, and some Republicans have expressed skepticism about Trump’s recent Affordable Care act subsidy proposal.
Democrats are highlighting the success of the IRA in lowering drug costs. Senator Ron Wyden (D-Ore.) stated, “Democrats took on Big Pharma by giving Medicare the power to negotiate on behalf of the tens of millions of seniors that want lower drug prices, while every Republican voted against it. Today’s proclamation is a result of Democratic efforts to lower health costs for older Americans.”
The IRA, signed into law in 2022, allows Medicare to negotiate the prices of certain high-cost drugs, a power previously prohibited. The frist ten drugs selected for negotiation will be available at lower prices starting in 2026.
