Newsletter · 2026-09-12 · Ashutosh Agarwal

The MFN Wave Widens as Medicaid and ACA Coverage Buckles - Healthcare Policy: Drug Pricing, IRA & Managed Care - Week of September 12, 2026

Healthcare Policy for the week of September 5 to September 12, 2026: nine more drugmakers signed most favored nation pricing deals and CMS says roughly 90% of branded drugs are now covered, the largest US manufacturers still have not signed and the carve-outs remain secret, ACA enrollment fell 13% as premiums to keep the same plan jumped 114%, new research put Medicaid state-directed-payment cuts at roughly $52 billion, and insurers keep retreating from Medicare Advantage.

Healthcare Policy: Drug Pricing, IRA & Managed Care

Week of September 12, 2026: The MFN Wave Widens as Medicaid and ACA Coverage Buckles

Intro

This was the week the government's cheapest lever on drug prices, jawboning, stopped being a threat and became the machine. The White House added nine more drugmakers to its "Most Favored Nation" pricing deals, and the head of Medicare went on CNBC to claim that roughly nine in ten branded drugs sold in America are now priced against what other rich countries pay. At the same time, the money side of the system is cracking in the other direction: Obamacare premiums are spiking, Medicaid is bracing for tens of billions in cuts, and health insurers are quietly kicking hundreds of thousands of seniors off their Medicare plans. Below is what the podcasts actually said this week, who said it, whether they run something or just talk about it, and why it matters for the companies caught in the middle.

A note on terms, defined once and in plain English:

• MFN (Most Favored Nation): the idea that the US should pay no more for a drug than the lowest price paid by other wealthy countries.
• IRA (Inflation Reduction Act): the 2022 law that let Medicare negotiate prices on selected drugs for the first time.
• 340B: a program that forces drugmakers to sell discounted drugs to hospitals and clinics serving lots of low-income patients.
• Gross-to-net: the gap between a drug's sticker (list) price and what the manufacturer actually keeps after all the rebates and discounts.
• State-directed payments (SDPs): extra Medicaid money states route to hospitals and doctors, often lifting their pay well above standard Medicaid rates.
• Medicare Advantage (MA): private insurance plans that administer Medicare benefits for a government payment.

TL;DR

• The MFN deal wave is real and widening, nine more companies signed last week, and CMS Administrator Dr. Mehmet Oz claims roughly 90% of branded drugs are now under MFN pricing, but the big US drugmakers still haven't shown up, the fine-print exclusions are secret, and everyone expects lawsuits.
• The money side of coverage is going the wrong way: ACA marketplace enrollment fell 13% (22M to 19M), premiums to keep the same plan jumped 114% after enhanced subsidies expired, and a new analysis pegs looming Medicaid provider-payment cuts at roughly $52 billion.
• Insurers are retreating from Medicare Advantage, forced disenrollments hit roughly 10% this year versus a 1% historical norm, with Humana alone exiting plans covering roughly 600,000 seniors in 2027 to chase "capital returns."

What's new

1. Nine more MFN deals, but the giants are still missing, and the details are hidden. (BioCentury This Week, Ep. 386, Sept 9, specialist policy journalism, industry-insider reporting)

On BioCentury This Week, Washington editor Steve Usdin, who reports from administration and pharma-lobbyist sources, said the most telling thing about the White House's MFN announcement was who didn't attend: "My focus really hasn't changed. It's still about who wasn't at the White House rather than who was. Because administration sources and pharma lobbyists tell me that companies like Vertex, Biogen, L-Nylam [Alnylam] are under pressure to do MFN deals. So far, there's no indication that they're going to succumb to that pressure."

Two companies did move, and disclosed it in SEC filings, not press events. Incyte "agreed to give state Medicaid programs access to Jakafe and Jakafe XR [Jakafi/ruxolitinib] at prices aligned with an international reference price," and BridgeBio "received a forward-looking exclusion for medicines that have been approved exclusively for orphan indications," convenient, since its entire pipeline is orphan drugs. Usdin's key point for investors is the leverage behind the deals: two mandatory Medicare pricing models the administration is holding over the industry, GLOBE (Global Benchmark for Efficient Drug Pricing, for Medicare Part B) and GUARD (Guarding US Medicare Against Rising Drug Costs, for Part D). GLOBE was supposed to start October 1; "that's not happening," and some expect both GLOBE and GUARD to slip to January 1. He also warned: "One of the things you can bet is that whenever it is announced, we're going to see litigation coming pretty quickly." Companies that signed were promised exclusions from GLOBE and GUARD, but "we don't know if it's limited to specific drugs or it covers entire portfolios, including future launches."

Why it matters: the market is being asked to price in a policy whose actual cost is unknown even to the participants. Usdin's read is that when the deals are finally revealed, companies will say they cost "nothing material in the next year or two," which tells you how much was really given up.

2. The head of Medicare puts hard numbers on MFN, and on $50 GLP-1s. (Squawk Pod, Sept 8, operator and insider: CMS Administrator)

On Squawk Pod, CMS Administrator Dr. Mehmet Oz, who actually runs the agency writing these rules, laid out the administration's scoreboard: "We had nine more companies come in last week to the Oval Office... Now 90% of all the drugs, branded products sold in America are under most favored nation drug pricing, which also, by the way, onshores them. So we're building about 100,000 jobs." He called it "the biggest drop in prices in 63 years," said the UK "has already agreed to increase their prices," and reached for a NATO analogy, the US is the "global freeloader" subsidizer that other countries must now match.

The most concrete, and most investable, detail was on obesity drugs: GLP-1 medications "are now sold to some Medicare beneficiaries under our new program at $50 a month... compared to over $1,000, which was the historical price. We have over 600,000 people who have joined this program for Medicare in the last two months." His justification is a long-term bet: that healthier patients mean "less complications, less illnesses, less need for renal failure, heart transplant," saving taxpayers over time.

Why it matters: Oz also flagged the expiration risk himself, "the contracts will expire after the administration completes its term. So we want Congress to codify these rules." That is the whole bull and bear case in one sentence (see The debate).

3. The other MFN framing: collective bargaining for Medicaid. (Health:Further, Ep. 206, Sept 9, pundits and industry commentators)

The hosts of Health:Further described the same nine deals (naming Teva, Astellas and BridgeBio) as agreements where "all state Medicaid programs [pay] prices for prescription drugs that match the lowest prices paid by other developed nations," and framed it approvingly as "collective bargaining on behalf of Medicaid, therefore on behalf of the taxpayers." Even critics of the administration, one host said, should score this as "a net positive." They paired it with the looming supply-side story: pharma is "staring down their biggest patent cliff in decades," with a Wall Street Journal analysis they cited putting more than $500 billion of annual sales at risk from expirations, Eli Lilly exposed least (roughly 25% of revenue), Novo Nordisk most (roughly 75%), Pfizer in the middle (roughly 50%).

Why it matters: MFN discounts landing on top of an unusually deep patent cliff is a double squeeze on branded-drug economics over the next several years.

4. The 2028 "tariff cliff" is coming for generics, and two years isn't enough. (Off Script: A Pharma Manufacturing Podcast, Sept 8, operator and industry practitioner)

On Off Script, Tom Strohl, president of consultancy Oliver Wight Americas (whose clients include major drugmakers), walked through the plan to use tariffs to push generic manufacturing back to the US by 2028. His verdict: tariffs are "a good start" but "not... the end game." There's still "a huge gap in labor costs between India and the United States," and the real math is "total landed cost," logistics, inventory, working capital, failure-to-supply penalties. Asked directly whether two years is enough time to reshore before the cliff hits: "I don't think that's enough time. No." He flagged that reshoring the underlying active pharmaceutical ingredients is "actually more complicated than moving generic drug manufacturing back," because of new plants and emission-control rules.

Why it matters: the tariff timeline and the physical timeline don't match. Expect drug-shortage and cost pressure in low-margin generics well before domestic capacity is ready.

5. Manufacturers start playing hardball on 340B discounts. (Pharmaceutical Executive, Sept 9, industry expert, operator-side)

On Pharmaceutical Executive, a 340B specialist described Eli Lilly cutting off 340B discounts to hospitals that won't submit claims data, "finally cut this off" after other approaches failed, a move already drawing lawsuits (Tampa General sued Lilly). If it holds, "I could see this being another tool that other manufacturers would use"; if it turns into "massive amounts of litigation," others stay on the sidelines. The bigger investor point is the "gross-to-net bubble": as Medicare negotiation pushes net prices down and Medicaid rebates and 340B liabilities rise, "the only way to even... maintain the same margin... [is] you need to raise your list price." A "gang of six" in Congress has floated a mandatory neutral clearinghouse to de-duplicate 340B claims.

Why it matters: every discount program, IRA negotiation, Medicaid rebates, MFN, 340B, now stacks on the same molecule, and the pressure-release valve is higher list prices, which feeds the next round of political anger.

The debate

The genuine two-sided argument this week is whether the MFN deal wave is a durable structural win or a fragile PR victory. Both sides were audible.

Steel-man for "this is real and it sticks" (Dr. Oz, CMS): Ninety percent of branded drugs are already in the program; it comes with onshoring and jobs; the market rewarded the companies, "market cap on the industry went up after the initial set of most favored nation drug prices"; and CEOs, in his telling, "realize that's the new national order" and would accept selling future launches at MFN prices in exchange for US market access. Real seniors are already paying $50 for drugs that cost over $1,000.

Steel-man for "it's fragile" (Steve Usdin, BioCentury): The largest US drugmakers still refused to sign. The companies that did signed voluntarily and privately negotiated secret carve-outs (BridgeBio's orphan exclusion; Incyte declining to tie future launches to MFN). The enforcement models (GLOBE, GUARD) haven't launched, keep slipping, and will be litigated the moment they do. And Oz himself concedes the contracts expire with the administration unless Congress codifies them, which no one expects a divided Congress to do quickly. As one host put it, several executives always treated this "as a one-term proposition."

A smaller, related debate: does putting GLP-1s on Medicare at $50/month save money or blow a hole in the budget? Oz argues the health savings pay for it over time; the Squawk hosts noted the open question of how much of the GLP-1 bill should ultimately shift from manufacturers to the government at all. The podcasts didn't resolve it, worth watching as enrollment (already 600,000+) scales.

The names in play

Note on sourcing: the drug-pricing and clinical items above come from specialist and operator sources (CMS, BioCentury, Pharmaceutical Executive). The Medicare Advantage disenrollment figures and the Humana CFO quote were relayed by a political-commentary podcast (see Read-throughs), so treat the framing as opinion and the underlying numbers as needing a second look.

Read-throughs

• PBMs and gross-to-net: the 340B discussion is really a warning that net drug prices and list prices are diverging further. The Pharmaceutical Executive guest tied 340B, Medicare negotiation and Medicaid rebates into one "gross-to-net bubble" that pushes list prices up; Unf*cking The Republic separately claimed the three biggest PBMs "pull in over 600 billion dollars in a single year."
• Biosimilars and generics: the 2028 tariff cliff (Off Script) is the key catalyst, reshoring won't be ready in time, so expect shortage risk and cost pressure in generics, and a slow, capital-heavy build in domestic API capacity.
• Ex-US: MFN is explicitly an export of US price pressure abroad, the UK has "already agreed to increase their prices" (Dr. Oz), and Health:Further and BioCentury both flagged European innovators shifting facilities and investment to the US.
• Medicaid and exchange insurers (CNC, MOH, ELV): two converging cuts. On A Health Podyssey, a Medicaid policy analyst estimated that new limits on state-directed payments could force roughly $52 billion in cuts (from a roughly $106 billion annual base of above-Medicare SDP spending across 39 states), reductions of 10% to 25% of total Medicaid spending in 17 states. Separately, Unf*cking The Republic (an advocacy show, but citing KFF, CBO, AMA and Georgetown) reported ACA marketplace enrollment down 13% (22M to 19M, first drop since the first Trump term), premiums up 114% to keep the same plan after enhanced tax credits expired, a proposed median 2027 marketplace premium increase of 15% (on top of 18% this year), and roughly $900B of Medicaid cuts over a decade with 10M+ projected to lose coverage by 2034.
• Hospitals (HCA, THC, UHS): the SDP cuts hit provider payments directly. On top of that, Health:Further noted HCA has already flagged a shift from commercial and government pay to self-pay on its earnings call, which means lower reimbursement and harder collections, and rising uninsured volumes as ACA coverage lapses.
• GLP-1 exposure: the policy story is now an access story. Beyond the $50/month Medicare pricing and 600,000+ enrollees (Dr. Oz), practicing physicians on BackTable ENT & Allergy described the new Medicare GLP-1 bridge program that rolled out July 1 (still requiring prior authorization), and said manufacturer direct-to-consumer pricing has improved from "between a car note and a house note" last year to "a couple of hundred dollars" now, with payers increasingly demanding specialist sign-off before covering the drugs.

What changed this week

• MFN went from a handful of participants to a claimed roughly 90% of branded drugs, with nine more companies signing and the first SEC-disclosed deal terms (Incyte, BridgeBio).
• The GLOBE enforcement model looks set to slip from its October 1 start, likely to January 1 alongside GUARD.
• Eli Lilly's 340B discount suspension for non-compliant hospitals marks a shift from "carrot" to "stick," and is now in litigation.
• New research put a concrete number, roughly $52 billion, on the Medicaid state-directed-payment cuts that had been abstract until now.
• The Medicare GLP-1 bridge program (live July 1) is beginning to show up in clinics, with 600,000+ enrollees cited.