Most-Favored-Nations Drug Pricing Policy: White House Quietly Releases Report Describing Voluntary MFN Deals

On May 6, 2026, the White House Council of Economic Advisors (CEA)[1] discreetly released the first report quantifying its view of the projected savings generated by the administration’s Most-Favored-Nation (MFN) drug pricing policy framework, based on existing MFN pricing agreements and expectations for future MFN agreements. According to the report, the MFN framework is expected to generate an estimated $529B in domestic savings and a 30% decrease in net prices for drugs in the U.S. over the next 10 years.[2]

The report, titled “Savings from Most-Favored-Nation (MFN) Drug Pricing Policy,” publicly describes for the first time key details regarding voluntary MFN agreements that the administration has reportedly reached with 17 of the world’s largest pharmaceutical manufacturers. The report further states that the administration “expects to reach similar agreements with most manufacturers of sole-source brand name drugs and biologics in the nation.”

The report states that the voluntary MFN framework distinguishes between future launches of pipeline products (referred to as “prospective MFN”) and products already on the market when the framework was introduced (referred to as “existing drugs”). Notably, the report states that the MFN benchmark will be based on the second-lowest price available within the reference country basket, rather than the single-lowest international reference price. According to the White House, this methodology is intended to avoid distortions created by pricing outliers and prevent “mass fluctuations in price over time.” The identified reference countries for manufacturers with MFN agreements include Canada, Denmark, France, Germany, Italy, Japan, Switzerland, and the United Kingdom.

Under the prospective MFN framework, the CEA states that manufacturers agree to offer MFN pricing on all future launches of pipeline products across all markets in the U.S., including the commercial insurance market. This never-before-announced aspect of the framework indicates that MFN pricing principles apply to future products and extend beyond federal healthcare programs. No estimate was given of the number of pipeline drugs that will launch over the term of any such MFN deals.

With respect to existing drugs, the CEA states that manufacturers agree to make such products available to state Medicaid programs at MFN prices. However, the report clarifies that the MFN price will only apply to state Medicaid programs where the current net price realized by state Medicaid agencies after rebates exceeds the MFN price. The CEA also states that the MFN rebates, which will be operationalized through state supplemental rebates, will not count toward the calculation of Best Price and will not affect manufacturer liability under the 340B program.

Manufacturers agree to offer discounted pricing for drugs and biologics purchased through direct-to-consumer channels, including TrumpRx.gov. Although operational details remain limited, the inclusion of direct-to-consumer distribution within the MFN framework reflects the administration’s broader effort to reshape traditional pharmaceutical distribution channels.

The report sheds further light on how the administration intends to calculate the MFN benchmark price itself. The administration defines MFN as “a price net of all manufacturer discounts, rebates, and other concessions, including portfolio-wide claw backs such as the UK Voluntary Scheme for Branded Medicines Pricing and Access (VPAG).” Net prices will be voluntarily reported by manufacturers following guidance issued by the Centers for Medicare & Medicaid Services (CMS).

The report emphasizes that the MFN framework is intended to operate in tandem with the administration’s broader trade policy objectives, including efforts to increase domestic pharmaceutical production. Recently, President Trump issued an Executive Order that links tariff relief to manufacturers’ willingness to enter into MFN pricing and domestic production agreements, while establishing significant tariffs on companies that decline to do so. This policy approach underscores the administration’s broader strategy of leveraging trade authorities to incentivize manufacturer alignment with domestic pricing and production objectives. The 17 manufacturers that entered into voluntary MFN agreements have reportedly secured three years of immunity from tariffs.

Finally, the report states that the administration is working with Congress to codify the voluntary MFN agreements into law “to ensure that patients continue to benefit from price discounts.” Although legislation supporting the administration’s MFN policies has been introduced in the U.S. House of Representatives, comprehensive federal MFN legislation appears unlikely to advance this year despite strong White House support.

The report does not discuss application of MFN pricing in the Medicare programs.

The CEA report provides the first White House-disclosed details into how the voluntary MFN framework may operate in practice. However, significant legal and operational questions remain. As the MFN landscape continues to rapidly evolve, it will be critical for stakeholders, including late development stage companies readying for launch and investors, to thoughtfully consider how MFN initiatives may shape commercialization strategies, global pricing dynamics, and investment decisions.

[1] The CEA is an agency within the Executive Office of the President and is charged with providing the president economic advice on the formulation of domestic and international economic policy.

[2] The projected savings figures are extrapolated from economic modeling assumptions regarding what is characterized in the report as the anticipated long-term effects of the MFN pricing framework.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.