US asks smaller drugmakers to discuss lowering prices for Medicaid

The Trump administration is asking small and mid-sized drugmakers to negotiate lower prices on their prescription medicines for the U.S. Medicaid program for low-income Americans, the Centers for Medicare & Medicaid Services said on Monday.

So far, 16 of the largest drugmakers including Pfizer PFE.N and Eli Lilly LLY.N have struck deals with the government after receiving letters from the Trump administration directing them to cut prices. But many companies, including around half of those represented by the largest pharmaceutical lobby group, PhRMA, were left out of the process.

CMS said on Monday it extended the application deadline for drugmakers to join the payment model, which aims to offer comparable drug prices to those paid in other developed countries. It said it will hold meetings with interested small and mid-sized manufacturers beginning on April 1.

"Extending this deadline will allow for small and mid-size manufacturers to participate and lower costs to the Medicaid program, providing more flexibility for state budgets and ensure that people who depend on Medicaid continue to access the care they need," CMS Innovation Center Director Abe Sutton said in a statement.

The agency extended the deadline from March 31 to April 30, 2026.

Sources told Reuters earlier this year that after the largest companies had reached pricing agreements, smaller companies had begun reaching out to contacts at the White House and CMS to try to create their own deals.

They were concerned in particular about new pilot programs that could set prices for Medicare drugs in large parts of the country, industry sources said. Those programs would require manufacturer rebates for drugs paid for by the Medicare health plan for millions of Americans age 65 and over if U.S. prices exceed international levels.

-Michael Erman/Reuters