The drug-pricing agreement Pfizer struck with the Trump administration in September could generate up to $280 million in annual savings for state Medicaid programs, according to an analysis published April 27 in the Journal of Managed Care & Specialty Pharmacy.
The agreement stems from a broader administration effort to tie U.S. drug prices to those paid in other high-income countries through the planned TrumpRx platform. Pfizer said in September it would sell nearly all of its drugs to Medicaid at international benchmark prices, reduce some consumer medication costs by 50% to 100%, and invest between $70 billion and $90 billion in domestic manufacturing and research.
Here are four notes from the study, conducted by the Johns Hopkins Bloomberg School of Public Health in Baltimore:
- Researchers examined six Pfizer drugs included in the Medicaid Drug Rebate Program and found the agreement could produce an additional 11.5% in rebates off gross Medicaid drug spending through “most favored nation” pricing benchmarks.
- The analysis focused on Eliquis, Ibrance, Xtandi, Nurtec ODT, Xeljanz and Inlyta, which accounted for 31.7% of Pfizer’s 2024 U.S. net revenue across all payers. Researchers estimated Medicaid savings by comparing existing rebate structures with international benchmark pricing across France, Germany, Italy, Spain and the United Kingdom.
- Savings potential varied across drugs. Researchers estimated Nurtec ODT could generate more than $135 million in Medicaid savings, while Ibrance could yield nearly $98 million. Two drugs — Eliquis and Xeljanz — already carried rebate levels exceeding 100% because of inflation penalties, meaning applying MFN pricing could increase Medicaid costs for those products.
- Unresolved questions surrounding implementation remain, including which Pfizer drugs would qualify for MFN pricing, how benchmark countries would be selected and whether confidential international rebate data would be accessible to U.S. regulators.
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