Paragon OBBB Event Tomorrow + Trump Reforms to SNAP & 340B

The August recess is in full swing in Washington, and kids nationwide are savoring the last few weeks of summer before they go back to school. But Paragon’s work continues. In today’s newsletter, I highlight a virtual event Paragon is hosting tomorrow; state waivers removing certain junk foods and drinks from Supplemental Nutrition Assistance Program (SNAP) coverage; letters sent by President Trump to 17 pharmaceutical companies; and a 340B pilot program.

We also have two new Paragon one-pagers that bust myths about the One Big Beautiful Bill (OBBB). This week’s one-pagers debunk claims that Medicaid contains only minimal waste, fraud, and abuse, and that the OBBB harms the most vulnerable enrollees.

Paragon’s Virtual Event Tomorrow on the OBBB

Tomorrow, August 7, at 11 a.m. EDT, Paragon is convening a virtual event on the OBBB. Ryan Long, Elle Minarik, and I will discuss the important health policy reforms within the OBBB, implementation challenges for the federal government and states, and how Congress and the Trump administration should think about future reforms. After a short presentation, we will answer as many questions from participants as possible.

Register for that event here.

Removing Junk Food and Sugary Drinks from SNAP

As a result of the Department of Agriculture approving six new state waivers this week, a dozen states will prohibit SNAP from covering certain categories of junk food, including soft drinks and candy, starting in 2026. These waivers place common-sense restrictions on a welfare benefit, will reduce federal subsidies for junk food and drinks, and should reduce consumption of unhealthy foods and improve health outcomes. An emerging consensus among policy experts holds that what we eat is extremely important for overall health and that poor diets are a primary factor in rising rates of obesity and chronic health conditions, such as Type 2 diabetes. Despite offering no nutritional benefit and being loaded with empty calories, soda is the single most-purchased item through SNAP.

The rise in obesity and diabetes in children, particularly lower-income children, is a serious public health concern. Money is fungible, of course, and some SNAP enrollees will use their own resources to purchase junk food and drinks that the program no longer covers. But these waivers will enable researchers to evaluate changes in consumption and health outcomes from the policy, which will provide valuable information to guide future policymaking.

Trump’s Most Favored Nation Drug Pricing Plan

Following his May executive order on most favored nation pharmaceutical prices, President Trump   on July 31.

The first policy requires extending “most favored nation” (MFN) pricing to Medicaid. Pharmaceutical companies are currently required to provide Medicaid the “best price” given to other purchasers. This policy essentially applies foreign prices to the Medicaid best price calculation.

A second policy mandates that new drugs launched in the U.S. must not be sold at lower prices abroad, aiming to eliminate the price disparity that causes Americans to pay much higher prices for brand-name drugs than people in other industrialized countries. By applying this policy prospectively to new products, the proposal could ameliorate concerns that we might be importing existing prices set by foreign governments and undermining innovation in new therapies. Instead, the prospective MFN can be seen as exporting U.S. pricing and ensuring other countries pay their share of research and development costs, which Americans have unfairly borne for decades.

Finally, the letters call for manufacturers to offer direct-to-consumer models for high-volume, highly rebated drugs at prices offered to third-party payors. Several manufacturers have already begun direct-to-consumer pricing models for products like the anti-obesity GLP-1 drugs. The president asks that manufacturers commit to these policy goals by September 29. It is unclear what authority the president would have to enforce his policy goals if manufacturers fail to comply. Although the goals of reducing U.S. pharmaceutical prices and ending global freeriding are laudable, a Wall Street Journal editorial on August 6 raises concerns this approach could discourage the development of generics and new breakthrough treatments. This is an important consideration and any policy should ensure that we protect incentives for innovation while eliminating this unfair price disparity.

A 340B Pilot

Also on July 31, the Trump administration announced a proposal to improve the broken 340B program. The 340B program, instituted by Congress in 1992, was designed to ensure that safety-net hospitals (those serving the poorest patients) acquire medicines at a discount. Unfortunately, the 340B program has perverted the pricing mechanism for prescription drugs and has developed into a significant profit center for large health systems. The administration’s proposal invites drug makers to submit plans to improve accountability in the program. We look forward to commenting on the proposal and future policy options to reform 340B.

Debunking the Myths of the One Big Beautiful Bill

Paragon has launched a dedicated webpage for the OBBB. The page includes our full summary of all the health policy provisions in the legislation, complete with the final estimates from the Congressional Budget Office. We now have 10 factsheets that tackle myths of the OBBB.

• Myth: The OBBB Medicaid reforms are unpopular.
• Myth: The OBBB cuts Medicaid.
• Myth: The OBBB will result in large coverage losses.
• Myth: The OBBB’s Medicaid provisions will force nursing homes to close.
• Myth: States will not be able to cope with the limits on Medicaid money-laundering mechanisms.
• Myth: Rural hospitals will close because of the OBBB.
• Myth: The OBBB largely repeals the Affordable Care Act.

• Myth: There is little waste, fraud, and abuse in Medicaid.
• Myth: The OBBB will harm the most vulnerable Medicaid enrollees.

We also have a longer factsheet that sets the record straight on the Medicaid community-engagement requirements in the OBBB.