Trump Admin Reaches Drug Pricing Deals with 17 Pharma Firms

The Trump Administration has finalized voluntary most-favored-nation (MFN) drug pricing agreements with 17 major pharmaceutical manufacturers, according to a White House research release published on May 5, 2026.

These agreements cover manufacturers that produce a significant portion of drugs used in the US market, per the White House summary. The policy targets price disparities where Americans pay higher amounts for the same medications compared to patients in other developed nations.

The release indicates that the deals will affect pricing for drugs under Medicare Part B, which serves about 60 million beneficiaries nationwide, based on standard Medicare enrollment data. Projected savings total $85 billion over seven years for the Medicare program and $30 billion in out-of-pocket reductions for patients, as detailed in the executive summary.

Before this policy, US drug prices often exceeded those in countries like Canada, Germany, and Japan, with no formal mechanism to enforce parity, per the White House document. The new MFN framework requires participating manufacturers to offer prices no higher than the lowest in specified developed nations.

The agreements take effect starting January 1, 2027, with phased implementation over the following year, according to the release's outlined timeline.

The deals trigger a review process by the Centers for Medicare & Medicaid Services to update reimbursement rates for affected drugs by the end of 2026. Pharmaceutical companies must submit pricing data from comparator countries quarterly, initiating compliance checks that could lead to penalties for non-adherence under existing Medicare statutes.

The policy also prompts potential congressional oversight, as the House Ways and Means Committee has jurisdiction over Medicare funding and may schedule hearings on the fiscal impact by mid-2027.

The MFN policy builds on an executive order issued by President Trump in 2020 that first proposed international reference pricing, which faced legal challenges and was paused until this revival, per public records of the order. Congress separately advanced the Lower Drug Costs Now Act in 2025, which includes provisions for negotiating prices on high-cost drugs but has not yet passed the Senate.