Trump Administration Unveils Details Most-Favored Nation Drug Prices

The Trump administration’s most-favored nation drug pricing strategy has been a topic of much discussion and speculation since it was announced in May. The plan aims to set price targets for prescription drugs based on the lowest price among a group of comparator countries with at least 60% of the United States’ gross domestic product per capita. However, details about how these prices would be determined were scarce until recently.

The Centers for Medicare and Medicaid Services (CMS) recently released critical details about the pricing model. The benchmark prices will be based on the second-lowest price among eight comparator countries, including Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the United Kingdom. Additionally, CMS introduced a new drug payment model called GENEROUS, which aims to make most-favored nation prices available to state Medicaid programs through manufacturer rebates. Participation in the model is voluntary for both manufacturers and state Medicaid agencies.

Under the GENEROUS model, states that opt in will be able to access most-favored nation level prices for participating manufacturers’ drugs through CMS-negotiated supplemental rebates tied to a most-favored nation net price benchmark. This model is intended to reduce Medicaid drug spending and improve patient access to medications from 2026 through 2030.

Neil Grubert, an independent global market access expert, provided detailed insights into the most-favored nation drug pricing methodology. The net prices for covered outpatient drugs will be adjusted by each country’s gross domestic product per capita, weighted by a purchasing power parity index. Participating manufacturers of single-source drugs or innovator multiple-source drugs must adhere to these pricing guidelines.

Several major pharmaceutical companies, including AstraZeneca, Pfizer, and EMD Serono, have already signed most-favored nation deals and agreed to participate in the GENEROUS model. The goal of the model is not only to reduce drug costs but also to improve Medicaid enrollees’ access to medications by establishing uniform coverage and utilization management policies.

While the GENEROUS model will not change Medicaid beneficiaries’ out-of-pocket costs, it aims to streamline access to medications and reduce costly hospital admissions and emergency room visits. However, questions remain about how CMS will obtain the net prices needed to calculate most-favored nation indices, especially in light of France’s recent decision to restrict the disclosure of net prices.

Overall, the most-favored nation drug pricing strategy represents a significant shift in the U.S. pharmaceutical market. As the Trump administration continues to implement and refine these policies, it will be crucial to monitor their impact on drug prices, patient access to medications, and overall healthcare costs. When it comes to comparing drug prices across different countries, there are several challenges that can arise. One major issue is the varying approval processes and timelines for pharmaceutical products in different jurisdictions. Even when a drug is approved by all relevant agencies, there can be delays in terms of pricing and reimbursement, making it difficult to accurately compare prices.

Another consideration is the discrepancy between the administration’s claims of most-favored nation prices and the actual prices posted on platforms like TrumpRx. For example, when looking at the list prices for a drug like Ozempic in comparator countries, it is evident that some countries have significantly lower prices than what is being offered on TrumpRx. This raises questions about whether the so-called most favored nation prices are truly competitive on a global scale.

Taking the autoimmune drug Xeljanz as another example, even with a 40% discount on TrumpRx, the monthly cost for patients is still significantly higher than prices in countries like France, Germany, and the U.K. The prices in these countries range from around $780 to $1,330 per month, making it unclear whether the most favored nation pricing strategy is delivering the promised savings to consumers.

Overall, the complexity of pricing and reimbursement systems in different countries poses a challenge for making accurate price comparisons. It is essential for policymakers to address these discrepancies and ensure that patients have access to affordable medications regardless of where they live. By transparently comparing prices and ensuring fair pricing practices, the administration can better serve the needs of patients and improve access to essential medications.