The Trump Administration on Aug. 31 announced that nine mid-sized pharmaceutical companies had agreed to lower the prices that Medicaid programs pay for drugs, bringing the total number of companies that made deals to lower prices to 26. The agreements are for so-called “most-favored-nation” prices, meaning that Medicaid will pay the same prices for drugs that other countries, primarily in Europe, pay. The Trump Administration also said that some most-favored-nation prices would be available on TrumpRx.gov, where patients can access drugs by paying cash rather than going through insurance.
The administration says that these deals cover 90% of the drugs used by Americans. Companies have also agreed to move some pharmaceutical production to the U.S., the administration said. In exchange, the companies will receive relief from pharmaceutical tariffs.
Lowering drug prices has been a top priority for the Trump Administration. Research from 2024 suggests that people in the U.S. pay 3-4 times what consumers in other countries pay for the same drugs. On May 12, 2025, President Trump signed an executive order directing the administration to take steps to bring American drug prices in line with those paid in comparable countries.
He then sent letters in July to 17 leading pharmaceutical manufacturers outlining steps they should take to bring down their prices. On Sept. 30, 2025, Trump announced an agreement with Pfizer to bring most-favored-nation pricing to Medicaid; by the end of December, 13 other companies had agreed to deals. For most people, this announcement won’t change costs, experts say.
That’s because it applies to Medicaid, and most Medicaid users already don’t pay very much for drugs. The announcement does mean that state and federal governments will see some savings, which will be welcomed as they see big cuts from H.R. 1, the One Big Beautiful Bill Act. Of course, it’s hard to know even how much the deal will save to Medicaid programs, he says.
That’s because the terms of the deals are not publicly available, and neither are the prices Medicaid pays. One research letter in JAMA from July estimated that the most-favored-nation policies from 17 pharmaceutical companies that had already been agreed to would lead to $8.6 billion in savings a year for Medicaid programs. But those savings are likely only for the short term, says one of that study’s authors, Dr.
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