The administration also announced a sweeping executive order targeting foreign drug prices and threatening direct federal rulemaking if manufacturers refuse to lower U.S. costs voluntarily.
President Donald Trump announced the latest wave of pharmaceutical agreements at the White House, naming nine companies that signed on to provide state Medicaid program discounts. The new participants include UCB SA, Bridgebio Pharma Inc., Sun Pharmaceutical Industries Ltd., Teva Pharmaceutical Industries Ltd., Astellas Pharma Inc., Alcon AG, BeOne Medicines Ltd., CSL Ltd., and Kyowa Kirin Co.
With these additions, the administration claims that 26 companies representing 90% of the domestic pharmaceutical market have now agreed to align what state Medicaid programs pay with prices charged in foreign countries. The other 10% are coming in — they have no choice,
Trump said during the White House announcement.
Executive Order Targets Global Price Discrepancies and Imports
Alongside the Medicaid deals, the administration released a multifaceted executive order aimed at cutting prescription drug costs across the board. Trade Representative and the Department of Commerce to take action against unreasonable and discriminatory policies
that lower drug prices abroad. Kennedy Jr. to facilitate direct-to-consumer sales that bypass health insurance middlemen to offer lower prices.
Under the terms of the executive order, the administration will issue price targets to drugmakers within 30 days to bring prices for American patients in line with comparably developed nations.
If manufacturers fail to comply voluntarily, the order outlines potential rulemaking to impose those price structures directly, alongside opening the U.S. market to international drug imports.
“Whoever is paying the lowest price, that’s the price that we’re going to get.”
President Donald Trump, via NPR
Administration officials argued that European nations and other developed regions have long paid artificially low prices while American patients subsidized global research and development. Europe’s going to have to pay a little bit more,
Trump said. The rest of the world is going to have to pay a little bit more, and America is going to pay a lot less.
Projected Savings and Industry Pushback
The White House estimates that the broader Most Favored Nation framework will generate $64.3 billion in federal and state savings over the next 10 years through the Medicaid and cash-payer channels specifically targeted by the voluntary agreements. When applied across all U.S. markets, including the private insurance sector, the White House projects total domestic savings could reach $529 billion over the decade. However, industry analysts note that the current voluntary deals do not address costs for the more than 160 million Americans covered by employer-sponsored insurance.
The Pharmaceutical Research and Manufacturers of America, known as PhRMA, immediately criticized the initiative. Following the executive order’s announcement, PhRMA President and CEO Steve Ubl issued a statement arguing that U.S. patients should not foot the bill for global innovation and pointed to foreign pricing policies and domestic supply chain intermediaries as the root causes of high American drug costs.
Academic research suggests the Medicaid pricing pilot could yield substantial savings if implemented broadly. An analysis published in the Journal of the American Medical Association by researchers affiliated with Harvard Medical School and the Urban Institute estimated that states could save more than $8 billion annually if drugmakers offered Medicaid prices comparable to foreign charges across 82 high-cost, brand-name drugs.
Next Steps and Future Developments
As the administration prepares a new round of drug-pricing agreements with midsize biotech companies anticipated as soon as August 31, 2026, questions remain regarding the executive order’s short-term legal enforceability. While the Biden administration previously initiated Medicare price negotiations for the first time under the 2022 Inflation Reduction Act—with discounts on an initial batch of 10 drugs scheduled to take effect in January 2026—the Trump administration is concurrently negotiating a second batch of 15 medicines under that statutory authority.
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