President Trump during an announcement in the Roosevelt Room of the White House in Washington, DC, on Friday, Dec. 19, 2025. The Trump administration has signed deals with 16 pharmaceutical companies. These agreements are designed to lower drug prices for some Americans in exchange for a three-year reprieve from threatened tariffs on their products. Photographer: Will Oliver/EPA/Bloomberg

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The most favored nation policies being pushed by the Trump administration strive to better align prescription drug prices between the United States and peer nations. MFN approaches to pharmaceutical pricing have been on President Trump’s agenda since his first term in office, in one form or another. But despite a flurry of executive actions and rhetoric about their supposed impact, thus far they’ve had little or no effect on prices that consumers pay.

In exchange for a three-year reprieve from threatened tariffs on their products, Trump signed deals with 16 pharmaceutical companies in the autumn of 2025. These strictly confidential agreements between the administration and drug manufacturers are designed to lower the prices of selected drugs in Medicaid, the main public program providing health insurance coverage for low-resource individuals, to MFN levels or the (second) lowest offered in other similarly wealthy nations. And drug makers agreed to sell some of their medications at discounts on a federal government-run website called TrumpRx. The portal lists the prices that the administration says it negotiated with 16 pharmaceutical manufacturers for several dozen prescription medicines. Cash-pay patients can access these products.

While the deals related to Medicaid could save the program money (though without knowing details of the agreements, it’s hard to tell), enrollees will not see changes to what they pay out-of-pocket as their cost-sharing was minimal to begin with.

Regarding TrumpRx, the president and federal government officials have touted that the platform offers Americans the world’s lowest prices on prescription drugs. But until now, it has failed to deliver what it promises. Critics have noted that most of the pharmaceuticals currently available on TrumpRx are in the latter stages of the product life cycle, which means that they already face lower-priced generic or biosimilar competitors.

While TrumpRx has modestly narrowed the gap between U.S. and foreign prices for some drugs, they don’t appear to be the lowest prices. For instance, autoimmune drug Xeljanz (tofacitinib) costs roughly $3,600 for a month’s supply for patients who make their purchases on TrumpRx. This constitutes a 40% discount off of the list price. To evaluate whether in fact this is an MFN price, I reviewed pricing and reimbursement data from France, Germany and the United Kingdom, which are three of the eight comparator countries being referenced to establish MFN benchmarks. The prices I found ranged from around $780 per monthly prescription to about $1,330.*

Other drugs offered on TrumpRx include two blockbuster weight-loss medications, Wegovy (semaglutide) and Zepbound (tirzepatde). Both are available for lower out-of-pocket prices at pharmacies in wealthy countries around the world. In some cases, Americans pay about twice as much as patients overseas.

Medicare director, Chris Klomp, told STAT News that TrumpRx was never meant to be used by Americans with health insurance — which is the vast majority of people. He also rejected the suggestion that Trump’s MFN policies, including TrumpRx, amount to price caps. Instead, he said that drug makers who sign on to voluntary MFN agreements can demand whatever price they want for their medicines in the U.S. They just cannot “undercut” the U.S. by offering cheaper prices in other wealthy countries. The problem is, however, that they do sell at lower prices in peer nations.

MFN-Based Models in Medicare and Medicaid

Under authority granted by the Affordable Care Act, the Trump administration has proposed three Center for Medicare and Medicaid Innovation initiatives that begin as early as this year. CMMI models are pilot programs operated by the Centers for Medicare and Medicaid Servies that are designed to test “innovative delivery and payment systems that aim to improve patient outcomes and lower healthcare costs.”

The three pilots include a voluntary model for MFN pricing in Medicaid, the GENErating cost Reductions fOr U.S. Medicaid (GENEROUS), intended to reduce prescription drug costs by negotiating manufacturer rebates that align Medicaid prices with lower prices in other countries. It focuses on decreasing expenditures on outpatient drugs by employing international price benchmarks. The GENEROUS model went into effect in January of this year. As of March, an unknown number of pharmaceutical manufacturers and 33 state Medicaid agencies have signed up.

It’s worth noting that Medicaid already negotiates among the lowest prices in America, particularly when coupled with so-called supplemental rebates. These are additional, negotiated payments drug makers pay to state Medicaid programs that exceed the mandatory federal rebate amount. These agreements, often connected to lists of “preferred drugs,” help states lower net prescription drug costs and allow manufacturers to secure a favorable position on formularies for their products. As such, it’s unclear how much impact the GENEROUS model will have on prices in Medicaid.

More controversially, CMS proposed regulations to establish two mandatory demonstration models operating with MFN pricing under Medicare Parts B and D. Medicare is the government insurance program serving the elderly and certain disabled groups. If a drug’s price exceeds a benchmark based on prices in other economically comparable countries, manufacturers must pay additional rebates to Medicare.

CMS announced a mandatory Global Benchmark for Efficient Drug Pricing model on Dec. 21, 2025, aimed at lowering Medicare Part B (physician-administered) drug costs, specifically with respect to an estimated 80 medications that meet eligibility criteria. The model will deploy international price benchmarks to calculate manufacturer rebates. The planned start date is Oct. 1, 2026 and will run for five years.

It’s a demonstration pilot affecting approximately 25% of Medicare Part B beneficiaries in select geographic areas. These have yet to be determined. Manufacturers must pay rebates if their U.S. prices exceed the benchmark (based on a basket of other wealthy countries). Patients could see reduced co-payments (10% instead of the standard 20%) for eligible Part B medicines.

Analogous to GLOBE, CMS proposed a new mandatory drug payment model called the Guarding U.S. Medicare Against Rising Drug Costs (GUARD) model in December 2025. It is a 5-year initiative starting Jan. 1, 2027, targeting high-cost Medicare Part D (outpatient) pharmaceuticals by linking their prices to international benchmarks. The consulting firm Avalere health estimates than GUARD could impact more than 170 drugs.

This model runs from 2027 through 2031. The pilot covers 25% of Medicare Part D beneficiaries in select (still unspecified) geographic areas.

Medicare director Klomp has said that the proposed models aren’t intended to necessarily lower U.S. prices. Rather, it’s to raise prices in international markets. But this raises questions around feasibility. Will firms respond by withdrawing from certain international markets or simply not marketing their products at all if by doing so would disadvantage them from a pricing perspective? Some drug companies are apparently delaying the launches of new medicines in Europe to avoid triggering international price comparisons.

Many questions remain regarding the ability to implement the GUARD and GLOBE models. Potential legal challenges could ultimately postpone or preclude implementation. The fact that drug company CEOs, including Dave Ricks of Eli Lilly, are on record opposing codification of MFN by congress suggests they fear legislation that would make international reference pricing permanent. It also indicates drug manufacturers view congressional action as more of a threat than temporary measures, which include the CMMI models and voluntary arrangements with the White House.

On the whole, MFN policies could bring down net costs for government payers but will likely have only marginal impact on consumers. For the vast majority of patients in the U.S., their out-of-pocket costs aren’t likely to change.