Trump Administration Pursues MFN Pricing for Prescription Drugs

By the end of 2025, 16 drug manufacturers had voluntarily negotiated and executed agreements to adopt Most Favored Nation (MFN) pricing for certain high-cost drugs. The Trump Administration highlighted the agreements in its “Great Healthcare Plan,” published on January 15, 2026, and communicated the government’s plans to “codify” such deals as a means of “get[ting] Americans the same low prices that people in other countries pay.” The Administration recently leveraged MFN pricing to establish the TrumpRx website, which helps uninsured or cash-paying consumers find drugs at a discounted price. The website reflects the Administration’s stated commitment to provide more lower-cost drugs directly to consumers. Currently, 40 branded medications are available at reduced prices.

Despite the high-profile debut of MFN agreements and increased direct-to-consumer access, these initiatives are unlikely to have a significant impact on the prices most individuals and health plans pay. According to comments provided to the press by a White House spokesperson, the negotiated discounts are limited to state Medicaid programs (which already receive discounts for certain high-cost drugs) and consumers who pay cash for their prescriptions. Consumers cannot combine savings with traditional insurance. The phrasing used in the Great Healthcare Plan is somewhat conflicting, as the Administration calls for “codifying” these MFN price deals but also states that “voluntarily negotiated deals with HHS/CMS will be grandfathered in.” All deals negotiated so far have been voluntary and are theoretically final; it is currently unclear what “codifying” means in this context or whether the Administration plans to pursue additional — voluntary or mandatory — agreements beyond the ones it has already negotiated.

Healthcare entities (e.g., payors, providers, pharmaceutical manufacturers, etc.) should note that the federal government cannot compel dealmaking or enact new requirements through executive action alone. As we noted following the publication of E.O. 14297 (Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients) in May 2025, President Trump’s executive orders have primarily served to communicate his administration’s intention to drive widespread adoption of MFN pricing during his second term. Legislative or regulatory action, however, stands to have a greater impact; in late December 2025, the Centers for Medicare and Medicaid Services (CMS) announced two proposed rules which — if enacted as proposed — would incorporate international price benchmarks into the methodologies used to calculate rebates for certain Medicare Part B and Part D drugs on a trial basis.   

Proposed Rulemaking: GLOBE and GUARD Models

On December 23, 2025, CMS published two new complementary Center for Medicare and Medicaid Innovation (CMMI) proposed models intended to substantially reduce Medicare program spending through alternative inflation rebate methodologies: the Guarding U.S. Medicare Against Rising Drug Costs Model (GUARD) and the Global Benchmark for Efficient Drug Pricing Model (GLOBE). GUARD would target Part D prescription drugs — typically, self-administered medications obtained through pharmacy benefits and covered under Medicare’s outpatient prescription drug program — while GLOBE would focus on Part B drugs and biologics, which are typically physician-administered in an outpatient setting. Both models would exclude drugs subject to a negotiated Maximum Fair Price (MFP) under the Medicare Drug Price Negotiation Program during their MFP price applicability period.

Health care organizations should note that GLOBE and GUARD have been proposed as time-limited trials rather than permanent approaches. GLOBE defines a five-year performance period beginning October 1, 2026, and ending September 30, 2031, with a seven-year payment period extending through September 30, 2033, to allow time for rebate calculation, invoicing, collection, and reconciliation. Similarly, GUARD would define its performance period from January 1, 2027, through December 31, 2031, with a payment period extending through December 31, 2033.

While participation would be mandatory for the manufacturers of eligible drugs, neither model would be rolled out nationwide. Rather, during the initial seven-year trial period, GLOBE and GUARD would be applied to approximately 25% of Medicare Part D and Part B beneficiaries, respectively, in randomly selected geographic areas. In the proposed rules, CMS estimates the models would generate total federal savings of $11.9 billion for GLOBE and $14.1 billion for GUARD, with savings derived from reduced Part B and Part D benefit spending, Medicare Advantage payment reductions, and premium offset impacts.

Enactment of these models is not a foregone conclusion. If GLOBE and GUARD are finalized by CMS, it seems likely that both models may inspire similar legal challenges from pharmaceutical manufacturers and other concerned entities — especially given that model participation is mandatory and manufacturers have no avenue to appeal CMS-calculated drug rebates aside from submitting a Suggestion of Error (SOE) if they believe a mathematical, computational, or clerical error exists in CMS’s calculation of a GLOBE or GUARD rebate amount. Both rules will likely prompt challenges under the Administrative Procedure Act, which may impede or ultimately prohibit implementation.  

In the meantime, we encourage all concerned organizations — from manufacturers to providers and health care suppliers — to consider submitting comments to either or both of the proposed rules. The government will be accepting public input until February 23, 2026.

Current Rulemaking: The Medicare Drug Price Negotiation Program

Regardless of whether GLOBE and GUARD are eventually enacted—or withdrawn—by CMS, pharmaceutical manufacturers and other healthcare organizations will need to pay close attention to emerging requirements defined by the Medicare Drug Price Negotiation Program over the next several years. Established under the IRA in 2022, the negotiation program empowers CMS to directly negotiate prices for a limited selection of high-cost, single-source drugs that lack generic or biosimilar equivalents.

MFPs for drugs included in the negotiation program’s first cycle officially went into effect on January 1, 2026. The government shared a list of the 15 drugs selected for the 2027 cycle by February 1, 2026; manufacturers will have until February 28, 2026, to sign participation agreements. Manufacturers should note that the enactment of GLOBE and GUARD would have no impact on the negotiation program’s schedule or scope, as the proposed models would be complementary to the IRA. 

Looking Ahead: Next Steps for Health Care Organizations

Healthcare industry organizations that may be affected by such price controls should continue to keep a close eye on the Administration’s informal statements and formal rulemaking. We also highly encourage entities that could be affected by GLOBE and/or GUARD to submit concerns regarding the proposed rules to the government before the comment period expires on February 23, 2026. Organizations that may be broadly impacted by TrumpRx, MFN pricing, and the IRA should also continue to closely monitor changes to these programs. Please reach out to any of the authors listed below or your preferred Crowell lawyer for further information or assistance.