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WASHINGTON — The Trump administration on Thursday unveiled a powerful new tool for states to rein in prescription drug spending. But there’s a catch: States can only wield their newfound power if they accept a cap on the federal funding they get for their Medicaid program.

The new tool on offer would effectively help states negotiate lower prices directly with pharmaceutical companies by denying coverage for certain drugs. Right now, unlike private insurers and some other federal providers, Medicaid programs must cover every single drug — a fact that some states say hampers their ability to get the best deal on pricey medicines.


“This is an opportunity for states to have greater negotiating power with manufacturers,” Seema Verma, the Centers for Medicare and Medicaid Services administrator, said on a conference call with reporters. While states could deny coverage for certain high-cost drugs, she said, programs would still include “strong protections” for drugs that treat conditions including mental illness, opioid addiction, and HIV/AIDS.

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