The Trump administration's "most favored nation" framework covers 17 pharma companies and applies across all U.S. markets, including private insurance
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The White House said Tuesday that its drug pricing agreements with pharmaceutical companies could generate $529 billion in domestic savings over the next decade, with federal and state governments expected to save a combined $64.3 billion through Medicaid during the same period.
The figures come from an analysis by the White House Council of Economic Advisers, which modeled the projected savings from President Donald Trump's "most favored nation" policy — a framework under which drug manufacturers agree to offer new medicines in the U.S. at prices comparable to those charged in other high-income countries. A separate model in the analysis put the potential savings as high as $733 billion over 10 years, according to the AP.
To date, the administration has reached voluntary agreements with 17 pharmaceutical companies. Cash payers and Medicaid enrollees are among those covered under the policy, which extends to every segment of the U.S. market, private insurance included. Looking ahead, officials said the goal is to bring manufacturers of sole-source brand-name drugs and biologics into comparable arrangements.
Because the terms of the individual deals have largely been kept from public view, outside experts have had little basis on which to assess whether the projected savings are realistic, the AP reported. In April, a measure calling for the public release of the agreements was put forward by 17 Senate Democrats along with Ron Wyden of Oregon, the ranking Democrat on the Senate Finance Committee. "If these deals are so great, why is the Trump administration afraid of showing them to the public?" Wyden said when announcing the measure.
Kennedy said the department was prepared to release information from the deals, provided it did not involve trade secrets or other proprietary data.
Critics have also argued that any price reductions under the framework would be offset by higher costs for drugs not covered by it. Aides to Sen. Bernie Sanders of Vermont produced a report examining 15 plan participants and concluded that, taken together, those companies saw their profits reach $177 billion — a 66% surge compared to the prior year, the AP noted. Administration officials pushed back, arguing the Sanders analysis measured list prices — which bear little resemblance to what consumers at the pharmacy counter actually spend.
For context, the most recent federal data shows that Americans spent $467 billion on prescription drugs in 2024. The White House analysis assumes that other countries will take on higher drug costs, which would give drug companies more revenue and help them keep funding research and development.
With November's midterm elections approaching, Trump has sought to position his pharmaceutical pricing push as a winning issue with voters. At a recent rally in Florida, Trump declared: "Now you have the lowest drug prices anywhere in the world. And that alone should win us the midterms."
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