MFN one year on: Taking stock of US drug pricing reform

One year after President Trump's Most-Favored-Nation (MFN) Executive Order, the policy landscape looks very different from many expected. While attention initially centered on the prospect of international reference pricing reshaping US drug prices, the past 12 months have instead been defined by negotiations with manufacturers, voluntary pricing concessions, and a series of evolving policy proposals.

In this Guest Column, Tim Wright, Executive Vice President for Access and Pricing at Genesis Research Group, revisits the predictions he made following the Executive Order, examines what has materialized, and considers what may lie ahead for the three remaining pillars of the Administration's MFN strategy: GENEROUS, GUARD and GLOBE.

From the publication of the MFN Executive Order way back on May 12, 2025, our stance at Genesis Research Group has been to look at the bigger picture and take account of the way in which the Trump Administration implements change. Whilst the headline was to deliver, ‘… Most-Favored Nation Pricing to American Patients,’ we hypothesized that the direct-to-consumer component within the Order is at least as important a vehicle to deliver change as international reference pricing. The subsequent Oval Office meetings between President Trump and CEOs of major pharmaceutical manufacturers resulted in announcements of significant inward R&D investment to the US, as well as MFN concessions on prices of drugs with significant expenditure. Since its launch in February 2026, Trump Rx has delivered $400million in savings, as reported by Trump Rx in June 2026. These savings may not be significant in the context of overall drug expenditure in the US, but the concessions President Trump negotiated demonstrate his approach to deal making.

“The potential to impose tariffs and the wholesale application of international reference pricing for US drugs has worked. The big question now is whether these are enough and what is the fate of GENEROUS, GUARD and GLOBE?”

GENEROUS

When the GENErating cost Reductions fOr US Medicaid (GENEROUS) model was, rather unexpectedly, announced at the end of 2025, we wondered which companies would actively engage, voluntarily disclose net prices and take MFN prices cuts in return for negotiating standardized coverage criteria that participating states can pick and choose. The lack of methodological detail in the original launch and its timing left us slightly bemused. However, in light of the limited company uptake (according to our sources, Centers for Medicare & Medicaid Services [CMS] has indicated that terms are being finalized with Pfizer, AstraZeneca and Merck & Co) and rumors that very few states are participating, could it be that GENEROUS was born out of the Oval Office negotiations and was offered as a return concession? After all, although levels of overall spending are similar to Medicare, the majority of Medicaid spending is concentrated on long-term care for the elderly and on people with disabilities, and less so focus on innovative drug expenditure. A good negotiator will have weighed the financial risk and impact of suggesting or agreeing to a Medicaid MFN deal, especially if it offers exemption from GUARD and GLOBE. If very few states sign up and select very few drugs that are prescribed to very few patients, then agreeing to GENEROUS participation makes absolute sense. We will see if our hypothesis is proven in the coming months.

GUARD and GLOBE

Since being announced in late December 2025, the proposed GLOBE (Global Benchmark for Efficient Drug Pricing) and GUARD (Guarding US Medicare Against Rising Drug Costs) policies have been widely anticipated, with both expected to have been published by now. However, we can imagine that CMS is dealing with an even higher degree of complexity than they expected, especially if our hypothesis that the team is having to get to grips with the complexities of ex-US and global market dynamics is true. Some of the statements in the Federal Register proposals for GUARD and GLOBE indicate that they could be on a steep learning curve. For example, how is CMS going to deal with manufacturers who have sold full rights to commercialize a drug to an ex-US entity that has full control over price-setting?

To hold the US entity responsible for adjusting prices in line with MFN rules over which they have no control appears to be a glaring hole in both GUARD and GLOBE. Also, what logic is there in assuming manufacturers will increase prices in ex-US markets as an immediate response to MFN (page 60410, Federal Register) when most health technology assessment (HTA) and pricing and reimbursement structures do not allow this to happen? There also appears to be a mismatch in the amount of effort required to collect, collate and submit international pricing data (page 60412, Federal Register), especially under model 2 (net price calculations).

The sheer volume of responses to the proposals, thought to be around 300 in total, and the number of areas for which CMS sought feedback (around 30 in each proposal) may also be causing an administrative headache and slowing the progression of GUARD and GLOBE to final policy. Time is rapidly running out and the August 2026 milestone to enable GLOBE to be in place for an October initiation date is fast approaching.

Is MFN implementation certain?

Bearing in mind the complexity of the methodology, the comprehensive nature of the questions asked, and the potential for CMS to be blindsided by the vagaries of global markets, we expect a raft of legal objections will be raised by as wide a range of stakeholders as those who submitted feedback in February. There is a realistic scenario in which implementation ends up in the long grass. In addition to this complexity, we feel that the concessions mentioned at the start of this piece are sufficient to allow the Administration to notch up the Executive Order as a win and demonstrate progress along the road to realigning US healthcare costs.

Not pursuing GLOBE and GUARD or, at least kicking them into the long legal grass, will require some political maneuvering to avoid loss of face. Four avenues already exist and have produced highly visible savings: inward investment, Trump Rx, extension of the Medicare Drug Price Negotiation Program, and Medicare Prescription Drug Inflation Rebate Program.

The Medicare Drug Price Negotiation Program was introduced by the previous administration under the Inflation Reduction Act of 2022 to allow CMS to negotiate prices for selected high-expenditure Medicare drugs. According to CMS, the first round of Medicare drug price negotiations, with negotiated prices taking effect on January 1, 2026, is expected to deliver approximately $6 billion in savings. The second round, covering an additional 15 medicines with prices taking effect in 2027, is projected to generate a further $12 billion. Recently, CMS has proposed regulations that would establish the Program as a permanent framework beginning in 2029, meaning up to 20 Medicare Part B and D drugs could be selected for negotiation in each future cycle. The statutory 60-day public comment period has opened and will end August 17, 2026.

Let’s also not forget that the primary aim of GUARD and GLOBE is to compare the rebates generated through MFN with those currently paid by manufacturers under the Medicare Prescription Drug Inflation Rebate Program, which is estimated to generate between $6 billion and $8 billion annually. Even if GUARD and GLOBE do not come to fruition, some minor changes to the existing Inflation Rebate Program would allow President Trump to claim victory. We have seen this approach before, in the announcement of the One Big Beautiful Act which included (manufacturer-favorable) adjustments to Medicare drug price negotiations to orphan drug prices.

Market response

Policy, pricing and access teams, including those at the pharmaceutical companies that received letters from the White House urging them to reduce US drug prices in line with the Administration's MFN agenda, have continued to prepare strategies to manage MFN-related risk. We have observed that many of these strategies are based on risk aversion rather than risk mitigation and, in some cases, have been based on a limited understanding of the detail in the Federal Register, especially the scope and breadth of the models. Market reactions have fallen into four broad categories: launch delay, alternative market access, pricing adaptation and indication strategy.

The most drastic of these has been to delay ex-US market launches until the final details of the policies are published in full – completely understandable for emerging biotech companies with one or two products launched in the US and poised to launch in ex-US markets. The risk to their US revenue, and share price, for these smaller manufacturers is far greater and potentially more damaging than forgone ex-US revenue.

Other manufacturers have turned their focus to alternative market access routes, including private markets in geographies previously considered late-launches; for example, Singapore, the United Arab Emirates and Brazil. This approach is limited by the extent of insurance coverage and the ability to pay for pure out-of-pocket.

A third approach has been pricing adaptation. Maintaining high list and negotiating deep confidential discounts is an option only available in limited main markets and one that many European authorities are loathe to adopt. The flip side of this pure pricing play is to accept a lower US price, but both these have immediate and obvious negative implications for revenue.

Finally, some manufacturers are pursuing a longer-term indication strategy, focusing on patient sub-populations where budget impact is considered minimal and price latitude greater. However, the obvious downsides of pursuing this approach include having to power clinical trials for sub-group analyses, with the associated increases in development costs and timelines.

Our current thinking

GENEROUS is on its journey towards implementation, so there is no turning back for manufacturers who have signed up. They are likely to be manufacturers who accepted participation as part of their negotiations and will have already taken the impact into account in their financial planning (what we consider to be somewhat limited).

The more difficult situation arises for manufacturers whose drugs will be included in the GUARD and GLOBE models. It is wise to continue to prepare for these elements of MFN, and to expect and plan for the worst.

“We feel there is a realistic chance that the impact will be limited, almost certainly late and quite possibly left in the long grass. We shall see what comes out in the wash in August, when we expect further details of GLOBE to be published.”

Author

Tim Wright
Executive Vice President, Access and Pricing, Genesis Research Group

Tim Wright leads the Access & Pricing division at Genesis Research Group. An economist and health economist, Tim has 30 years of experience in the biopharma sector, including 18 years in executive positions in strategic consulting firms and 12 years in global EU and UK roles in industry. In consulting, Tim has provided strategic leadership in over 1000 engagements with small biotechs to top-five pharma and across all therapy areas. Within the industry, Tim was responsible for global pricing and access strategy for two mega-brands and the CV, respiratory, infection and inflammation early asset portfolio at AstraZeneca. He is former Head of HEOR at Janssen Cilag UK, and brings experience from EU Pricing for Allergan and his time as a clinical scientist at Astra.

The views and opinions expressed in this feature are those of the author and do not necessarily reflect the views or positions of Genesis Research Group and its affiliates. The information provided is for general information purposes only and should not be taken as professional advice.

The opinions expressed in this feature are those of the author and do not necessarily reflect the views of The Evidence Base® or Becaris Publishing Ltd.

Sponsorship for this Guest Column was provided by Genesis Research Group.