The White House shares new details on the MFN framework

The White House Council of Economic Advisers has published a report¹ on the Most-Favored-Nation (MFN) drug pricing framework which offers additional insights on methods and the impact on U.S. prices and savings over the upcoming years.

The administration frames the goal of MFN provisions as lowering U.S. prices and putting upward pressure on prices paid in other developed countries, emphasising the shared global responsibility to contribute to pharmaceutical innovation.

The MFN price is defined as a net price after all discounts, rebates, and other concessions, including portfolio-wide clawbacks such as the UK's Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG). Reference countries – from which MFN prices are derived – are the G7 (ex-US), Denmark, and Switzerland. The benchmark for U.S. prices is the second-lowest reference country price, designed to avoid undue outlier influence. International net prices will be adjusted by the ratio of GDP per capita in comparison to the U.S. using a purchasing power parity adjustment and most recent data.

Net prices will be voluntarily reported by manufacturers following methodological guidance issued by the Centers for Medicare and Medicaid Services (CMS). The process for the reporting and auditing of net pricing data has been designed to avoid conflicts with ex-U.S. confidentiality laws, following the approach designed by the Arbitration Board in Germany, where manufacturers have traditionally been required to submit net pricing information from reference countries.

Key components of the MFN framework

Prospective MFN

• Mechanism: Caps the average net price across all sectors in the U.S. at MFN prices, after statutory and voluntary concessions
• Legal status: Voluntary agreements with parallel efforts to codify into law
• Market scope: All US markets – private insurance, Medicare, Medicaid
• Products: Future/new drug launches only – branded sole-source drugs and biologics
• Impact: Expected to reduce net prices in the U.S. by approximately 30% over the next decade

Medicaid MFN (voluntary MFN framework)

• Mechanism: Manufacturers provide covered outpatient drugs to Medicaid state programs at MFN prices operationalised through existing State supplemental rebate mechanisms
• Legal status: Voluntary agreements – works within current law without needing new legislation
• Market scope: Medicaid beneficiaries
• Products: Existing branded single-source drugs and biologics already on the market with some biosimilars and multi-source drugs included for optionality. Therapeutic classes expected to generate the greatest savings include antipsychotics, antiretrovirals, antineoplastics, drugs indicated in inflammatory diseases and antidiabetics
• Impact: Would reduce Medicaid spending on impacted drugs by $14.4B per year. Over 10 years, total federal and state savings are projected at $64.3B

TrumpRx.gov

• Mechanism: Secures discounted pricing for self-administered drugs and biologics purchased in the direct-to-consumer or direct-to-patient channel
• Legal status: Voluntary manufacturer participation with no current statutory basis. Proposed legislation would add a statutory element by requiring insurers to count TrumpRx purchases toward patient deductibles and out-of-pocket maximums
• Market scope: Direct-to-consumer/uninsured channel only – not integrated with insurance at present
• Products: Self-administered drugs and biologics with some biosimilars and multi-source drugs included for optionality. Biggest impact expected on high out-of-pocket categories like GLP-1s and fertility medications
• Impact: As of 26 April 2026, 16 of the 17 companies with voluntary MFN agreements have integrated their discounts into TrumpRx.gov. The price of injectable GLP-1s fell from $1,000-$1,350 per month to $350 on TrumpRx.gov. Fertility medication Gonal-F can be accessed at $25 per 75 units down from $75. The cost of prescription drugs for a standard IVF cycle has decreased from $5,187 to $2,996

Medicare GLP-1 Coverage

• Mechanism: Expands coverage for Medicare patients to anti-obesity GLP-1s through a flat co-payment of $50 per month (“GLP-1 Bridge” model). Will allow plans to prepare for a transition to a longer-term solution for expanded access through the Part D benefit (“CMMI BALANCE Model”)
• Legal status: The GLP-1 Bridge is a time-limited executive authority which will begin on 1 July 2026. CMMI is an executive body created to test innovative payment and delivery models
• Market scope: Medicare beneficiaries
• Products: Anti-obesity GLP-1 drugs

With nearly $600B in projected 10-year savings across all pillars and voluntary agreements already in place with 17 manufacturers, the MFN framework represents a significant structural shift in US pricing and market access. Whether the projected impacts prove accurate or not, the direction of travel is clear and the implications for global launch strategies will be material.

Article by Marietta Paraskevaides

References

1. White House Council of Economic Advisers (2026) Savings from Most-Favored-Nation Drug Pricing Policy. https://www.whitehouse.gov/research/2026/05/savings-from-most-favored-nation-drug-pricing-policy/.

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