Puerto Rico joins most favored nation drug‑pricing program amid growing questions over secrecy, transparency
By THE STAR STAFF
Puerto Rico will now receive the same internationally benchmarked prescription drug prices as every U.S. state under the Trump administration’s Most Favored Nation (MFN) drug‑pricing initiative — a major shift for an island long constrained by unequal federal healthcare funding. But the move comes as the administration faces intensifying scrutiny over the secrecy surrounding the agreements that underpin the program.
The White House announced last week that all 50 states, the District of Columbia and Puerto Rico have signed letters of intent to join the GENEROUS model, the Medicaid demonstration project that applies MFN pricing. The administration claims the program will unlock $64.3 billion in savings over the next decade. Yet independent analysts say those savings cannot be verified because the underlying drug‑pricing agreements remain confidential.
During Senate confirmation hearings last week, Chris Klomp — director of the Center for Medicare (CMS) and one of the architects of MFN pricing — faced pointed questions about the opacity of the deals. Sen. Elizabeth Warren (D-Mass.) pressed Klomp on what drugmakers received in exchange for agreeing to lower Medicaid prices, asking whether the administration granted tariff relief, exemptions from Medicare pricing demonstrations, or expedited FDA approvals.
“I want to know what was given away in these contracts,” Warren said, according to a Forbes report. Klomp responded that the details must remain confidential to protect “trade secrets and other proprietary information,” though he said the agreements’ “principles” or “frameworks” are public.
The secrecy extends to the GENEROUS model itself. CMS has disclosed that benchmark prices will be based on the second‑lowest price among eight wealthy nations — Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the U.K. But the agency has not explained how it will obtain reliable net price data from countries that do not disclose it. In fact, the French Senate recently voted to block net price transparency to avoid spillover effects from MFN, and Spain has passed similar laws.
States — and Puerto Rico — will also be allowed to choose which drugs they want at MFN prices, but those selections will not be made public. Discount structures and final net prices will remain secret as well, leaving patients, providers, and even legislators unable to evaluate whether the program delivers meaningful savings beyond the substantial rebates Medicaid already receives.
For Puerto Rico, the stakes are particularly high. The island’s Medicaid program has long operated under capped federal funding and lower matching rates, creating chronic budget pressure for public hospitals and clinics. Access to MFN pricing could stretch limited resources further, especially for chronic conditions that disproportionately affect Puerto Rico residents, including diabetes, asthma and cardiovascular disease. Lower drug costs could ease financial strain on the healthcare system and reduce medication rationing among low‑income patients.
But the lack of transparency complicates the picture. Without visibility into which drugs Puerto Rico selects, what discounts apply, or how MFN prices compare to existing rebate agreements, policymakers cannot assess whether the island is receiving the full benefit promised by the administration. And because Medicaid enrollees already pay minimal cost‑sharing, the program will not directly reduce out‑of‑pocket costs for most patients — a point acknowledged in the Forbes analysis.
The administration has touted TrumpRx — a federal platform offering direct‑to‑consumer access to discounted drugs — as evidence of progress. But critics note that many of the drugs listed are late‑cycle products already facing generic competition, and the site does not offer the “world’s lowest prescription drug prices,” despite the president’s claims.
Klomp has also said publicly that MFN is not designed to cap U.S. prices but to raise prices abroad, a strategy that may be difficult to execute given Europe’s tightening pharmaceutical budgets. Some drugmakers have already delayed launches in Europe to avoid triggering international price comparisons.
For Puerto Rico, inclusion in MFN pricing represents both opportunity and uncertainty: a chance to finally access drug prices on par with the states, but under a framework whose terms remain largely hidden from public view. As the Sept. 30 deadline approaches for states and territories to finalize binding agreements, the island’s healthcare leaders will be watching closely — not only for promised savings, but for clarity on how the program will benefit Puerto Rico.
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