Drug Pricing Deals Expand to Nine Midsize Drugmakers Under Trump

Drug pricing deals move from Big Pharma to midsize drugmakers

The White House's campaign to tie U.S. drug prices to what other wealthy countries pay has moved past the industry's largest companies. On August 31, President Trump announced "most favored nation" (MFN) agreements with nine midsize manufacturers: Alcon, Astellas Pharma, BeOne Medicines, BridgeBio, CSL, Kyowa Kirin, Sun Pharma, Teva Pharmaceuticals and UCB.2224 The administration says this brings the number of companies with MFN deals to 26, which it claims covers 89% of the branded drug market.22 Bloomberg first reported the plan, and Reuters picked it up a few days earlier, saying a new round of voluntary deals with midsize biotechs could come as soon as August 31.2922

The drugs involved treat costly chronic and rare conditions, including hemophilia, Parkinson's disease, macular degeneration, glaucoma, liver disease, skin conditions and several cancers.22 The companies also committed at least $19.6 billion in near-term U.S. manufacturing investment. Several will donate active pharmaceutical ingredients to a national reserve: UCB pledged levetiracetam, and Sun Pharma pledged clindamycin and doxycycline.25

The administration presents this as the next phase of a policy that started with a May 2025 executive order and letters to 17 large drugmakers in July 2025. All 17 have since signed.22 A closer look at the deal terms, and at what they leave out, shows that this second wave is mainly a Medicaid story. The effects on Medicare, Medicare Advantage and overall health care costs are much less clear.

What the midsize deals cover, and what they don't

The main commitment is that all nine companies will offer state Medicaid programs prices in line with those paid in other developed countries, including through the GENEROUS framework.24 Analysts at Mintz noted that these agreements appear to be specific to Medicaid. Unlike the first wave, they have not been described as including direct-to-consumer discounts or broader arrangements, and it is unclear whether any of the nine companies' drugs will appear on TrumpRx.gov.24 BioPharma Dive reported the same uncertainty about TrumpRx.28

The coverage does not fully agree on this point. Forbes describes the typical MFN pledge as including launch prices comparable to the lowest in peer countries, Medicaid discounts and direct cash sales to patients.7 The White House fact sheet does say the nine companies will guarantee MFN prices on all new innovative medicines they bring to market.22 The most likely reading is that the midsize deals keep the forward-looking launch-price promise and the Medicaid discounts but drop the consumer-facing parts that made the first wave easy to market.

There is also some uncertainty about who actually signed. Reuters reported that Teva said it was still in discussions even though the White House listed it among the nine.25 And none of the announcements say which drugs will be discounted or by how much.24

The Medicare tradeoff

For Medicare beneficiaries, the most important detail is one the White House fact sheets don't mention. The manufacturers' own press releases say the companies will be exempt from future pricing mandates and/or potential Section 232 tariffs in return for their commitments.24 BioPharma Dive reported that some drugmakers believe their deals could exempt them from two proposed Medicare MFN payment models, GLOBE and GUARD.28 A Lancet study had estimated those models could cut Medicare net drug spending by about $11.6 billion a year in their first phase.28

At least for GLOBE, that is already happening. CMS's final rule for GLOBE, which covers drugs given in doctors' offices, now projects $440 million in savings over seven years. That is 96% less than the original $11.9 billion estimate, and the program will apply to only four manufacturers because the others are exempt through their participation in the Medicaid pilot.23 Johns Hopkins researcher Ballreich described the incentive directly: Medicare is where drugmakers make their money, and Medicaid is often an afterthought.23

Taken together, the reporting suggests that the voluntary deals have traded discounts in Medicaid, which already pays some of the lowest drug prices in the U.S. because of required rebates, for relief from mandatory price-setting in Medicare, where far more money is at stake.23 That reading is supported by the GLOBE numbers, and it is the clearest result of the policy so far.

Medicaid savings claims face scrutiny

The administration's savings figures are large. On September 18, Trump announced that all 50 states, Washington, D.C., and Puerto Rico would get MFN pricing through GENEROUS. He cited a Council of Economic Advisers estimate of more than $64 billion in Medicaid savings over a decade and said the total could reach $100 billion.510 The White House also says the MFN deals overall will save Americans more than $600 billion.8

Independent analysts are more cautious. FactCheck.org found that even using the White House's own projections, state savings would start at less than 2% of annual state Medicaid spending and would shrink over time.23 Researchers told the outlet that several companies have said in SEC filings that Medicaid MFN pricing applies only to "certain" or "select" products. One forthcoming study of 86 major branded drugs found no savings at all for more than a third of them.23 States that signed participation agreements before the September 30 deadline said they did so mainly to see the prices, and they are still deciding whether to accept any offers.23 Some deals reportedly run for three years, and Pfizer's ends on the last day of Trump's term.23

Academic estimates differ widely depending on assumptions. A JAMA analysis found states could save more than $8 billion a year if foreign-level prices applied across 82 high-cost drugs.26 A separate study put annual GENEROUS savings at $3.1 billion, depending on which drugs are included.23

Tariffs push smaller biotechs to sign

The reason midsize firms are signing became clearer when 100% tariffs on certain patented drugs and ingredients took effect at the end of September, this time aimed at smaller companies that rely heavily on overseas manufacturing.21 Companies that sign MFN agreements and commit to onshoring get three-year tariff exemptions. Companies that only onshore face a 20% tariff until 2030.21 Brookings fellow Marta Wosińska said more than 100 firms may lack the resources to move production to the U.S. For some of them, merging with a large drugmaker or selling the product could be easier.21 The Biotechnology Innovation Organization warned that the tariffs put more strain on the small and midsize companies behind many future treatments.21

This matters for health care costs in a way the price headlines don't capture. Axios reported that some manufacturers could pass tariff costs on through higher list prices or smaller rebates to purchasers.21 If that happens, the pressure meant to lower prices could raise net costs for commercial insurers and Medicare plans in some cases.

Medicare Advantage and Part D going into open enrollment

These deals arrive just before Medicare open enrollment, which runs from October 15 to December 7.14 CMS projects the average Medicare Advantage premium will fall 16.5%, from $14.37 to $12.00 a month in 2027. It also projects the drug portion of MA plans will fall 38%, from $11.32 to $7, after rebates.11 Average premiums for stand-alone Part D plans are expected to rise by less than $1, to $36, as a temporary premium stabilization subsidy ends.1119

Other costs are going up. The Part D out-of-pocket cap rises from $2,100 to $2,400, and the maximum deductible rises from $615 to $700.15 The average number of stand-alone plan choices per beneficiary drops from 11 to 9.14 The biggest Medicare price changes for next year come from the Inflation Reduction Act's negotiation program, not from the MFN deals. Negotiated prices for 15 more drugs, including Ozempic, Wegovy and Rybelsus at $274 a month, take effect January 1. CMS estimates those prices will save Medicare about $12 billion a year and save enrollees $685 million out of pocket.15 Pharmacy Times similarly concluded that the MFN deals mainly affect Medicaid and cash purchases and leave private insurance and Medicare prices largely unchanged.2

The bottom line

The midsize deals expand the administration's MFN strategy on paper, but the details are thin. The terms are confidential, the company lists are disputed and the savings estimates are untested.723 For seniors comparing Medicare Advantage plans this fall, the deals make little difference to next year's costs. The bigger long-term effect may be what drugmakers got in return: exemptions that have already cut GLOBE's projected Medicare savings by 96%.23 The White House is now asking Congress to pass a broader "Great Healthcare Plan"22, which in effect acknowledges that company-by-company deals have limits as a way to control health care costs.