The Trump Administration Continues to Make Drug Pricing Moves, Announces First MFN Agreement

Key Points

• The Trump administration’s announcement of the first MFN agreement is a major drug pricing policy milestone.
• Industry and policymakers await the release of the administration’s Global Benchmark for Efficient Drug Pricing (GLOBE) Model.
• Additional actions are expected as drug pricing continues to be a high priority for the administration.

Lowering drug prices for American patients continues to be a key area of focus and activity for the Trump administration. In May, the President issued the “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients” Executive Order, laying out a series of actions as part of the administration’s drug pricing agenda. In the months following this announcement, the administration has pursued policy levers to drive action on lowering drug pricing, including the President announcing via Truth Social that, effective October 1, a 100% tariff on brand-name and patented pharmaceutical products would be imposed unless a company is building its manufacturing plant in the United States. However, at the writing of this alert, the required proclamation necessary to implement this tariff has not yet been issued, there are no additional details, and the tariff is not in effect. On September 30, the administration unveiled the details of a deal it reached with Pfizer, the first deal negotiated with a pharmaceutical company to bring most-favored-nation (MFN) pricing to Americans and marking a major milestone for the administration’s drug pricing agenda.

As outlined in the administration’s announcement of the Pfizer MFN deal, State Medicaid programs will have access to MFN drug prices on Pfizer products. How MFN prices will be situated with respect to the current Medicaid Drug Rebate Program remains to be clarified. The agreement also guarantees MFN prices on all new innovative medicines Pfizer brings to market in the U.S. (presumably for all patients) and requires Pfizer to repatriate increased foreign revenue on existing products that Pfizer realizes as a result of the administration’s trade policies. The agreement also requires Pfizer to offer specific medicines to treat certain chronic illnesses at a deep discount off the list price when selling directly to American patients outside of their health insurance benefits. The agreement echoes the May 2025 MFN Executive Order’s focus on rebalancing the prices American patients are paying compared to patients overseas (“global freeloading”), establishing MFN pricing for drugs for American patients and facilitating direct-to-consumer sales.

In announcing the Pfizer agreement and framing, as the first MFN deal, the administration has set an expectation of additional MFN deals with pharmaceutical companies, even if the timing and specific details of those announcements remain to be seen. The whole-of-government approach to drug pricing by the administration was also evident as the President and senior officials of his administration spanning agencies across the Department of Health and Human Services and the Department of Commerce participated in the announcement. The implementation and details of the Pfizer MFN deal, and any deals that follow, will be closely watched as industry and policymakers continue to navigate the administration’s drug pricing agenda.

At the White House announcement of the Pfizer MFN deal, FDA Commissioner, Dr. Marty Makary highlighted how pharmaceutical companies that “equalize” their drug prices to other countries could be eligible for the Commissioner's National Priority Voucher Pilot Program, which aims to accelerate drug review for companies supporting U.S. national interests. Since the pilot program was first announced by FDA in June, the agency has provided additional details regarding implementation of the program and the priorities it seeks to advance, including addressing a large unmet medical need, onshoring domestic drug manufacturing or increasing affordability and which could include a company lowering its drug prices consistent with MFN pricing—three priorities specifically highlighted by Commissioner Makary at the Pfizer MFN deal announcement. Industry and policymakers will watch for additional developments regarding the FDA implementation of this pilot program and how it intersects with the administration’s drug pricing agenda.

In addition, industry and policymakers will be watching for the release of the Global Benchmark for Efficient Drug Pricing (GLOBE) Model, a proposed rule by the Centers for Medicare & Medicaid Services that is currently pending review at the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB). Once released, the GLOBE Model proposed rule will provide further insight into how the administration is seeking to advance drug pricing policy and provide an opportunity for interested parties to submit public comment as part of the rulemaking process.