Trump admin rejects Massachusetts drug pricing proposal

Trump admin rejects Massachusetts drug pricing proposal
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The Trump administration on Wednesday rejected a request from Massachusetts that state officials argued would have given them more flexibility over its Medicaid program and greater negotiating power over drug companies.

The state's Health and Human Services department asked the administration to approve a plan that would have allowed the state to limit what drugs would be covered in its Medicaid program. 

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Currently, states are required to cover almost all drugs approved by the Food and Drug Administration, but states are looking for new ways to cut down drug prices as Medicaid costs continue to eat up state budgets. 

While drug manufacturers provide deep discounts to states and the federal government in exchange for having their drugs covered by Medicaid, states argue these rebates, which are a set percentage of a drug's list price, are no longer enough sufficient as drug costs keep rising.

In an effort to reduce what the state is spending on prescription drugs through Medicaid, the state asked the administration if it could exclude coverage of drugs that aren't cost effective and have little evidence of actually working. 

But the administration ruled that the proposal goes against federal law.

The Trump administration told the state that if it wanted to pick and choose what drugs its Medicaid program covered, it would have to forgo those rebates and negotiate directly with drug companies. 

The proposal faced fierce opposition from industry groups and drug companies, who argued it would cut off access to life saving treatments.

If approved, the administration likely would have faced many lawsuits, and other states likely would have followed with their own requests.