Industry Watch Alert
Key Takeaways
The White House has finalized the first agreement implementing “Most-Favored-Nation” (MFN) drug pricing, ensuring U.S. patients pay no more than the lowest price offered in any economically comparable country.
The inaugural deal covers select high-cost, physician-administered specialty drugs and will be phased in across Medicare Part B and participating commercial plans beginning in CY 2026.
Manufacturers joining the MFN program must provide real-time price reporting and face penalties for non-compliance.
Payers and providers should expect immediate changes to reimbursement benchmarks, contract clauses, and prior-authorization protocols, with downstream effects on value-based payment models.
Impact
- Financial: Actuarial models indicate up to a 45% reduction in Medicare Part B spend for the affected drug classes, redirecting savings toward alternative payment and quality-improvement initiatives.
- Operational: Payers must update fee schedules and renegotiate specialty-pharmacy contracts; providers should prepare for revised buy-and-bill margins and potential inventory adjustments.
- Compliance: MFN reporting requirements mirror existing Medicaid best-price rules but add quarterly attestations and civil monetary penalties up to $100,000 per day for inaccurate data.
- Strategic: CFOs, CMOs, and Value-Based Care leads should reassess risk-sharing arrangements and evaluate formulary strategy to preserve clinical outcomes while capturing MFN savings.
Summary
On 30 September 2025, President Donald J. Trump announced the administration’s first executed MFN pricing agreement, delivering on a longstanding policy goal to tie U.S. drug costs to prices in peer nations.
The pact (negotiated with an undisclosed multinational pharmaceutical firm) covers a portfolio of injectable biologics commonly used in oncology and autoimmune care. Beginning 1 January 2026, Medicare will reimburse these products at the lowest price available among G7 countries, adjusted quarterly. Commercial payers opting into the program will receive the same rate.
The Center for Medicare & Medicaid Innovation (CMMI) will oversee implementation and compliance auditing. Industry analysts project accelerated adoption of biosimilars and greater emphasis on outcomes-based contracts as stakeholders adapt to the new pricing floor.
Sources
Fact Sheet: President Donald J. Trump Announces First Deal to Bring Most-Favored-Nation Pricing to American Patients
Official White House fact sheet detailing agreement to implement most-favored-nation drug pricing.
https://www.whitehouse.gov/fact-sheets/2025/09/fact-sheet-president-donald-j-trump-announces-first-deal-to-bring-most-favored-nation-pricing-to-american-patients/
FAQ
Q1. What is the Most-Favored-Nation (MFN) drug-pricing deal announced by President Trump?
It is a federal agreement that ties U.S. prices for certain high-cost Medicare Part B drugs to the lowest price paid in comparable G7 countries.
Q2: When does MFN drug pricing start for Medicare Part B beneficiaries?
The first wave of MFN pricing becomes effective on January 1, 2026, following a 90-day drug-list publication by CMS.
Q3. How will MFN pricing affect provider reimbursement for specialty drugs?
The traditional ASP + 6% model will be replaced by the MFN benchmark plus a fixed add-on fee, altering buy-and-bill margins and inventory strategies.
Q4. What compliance rules must pharmaceutical manufacturers follow under MFN pricing?
Drug makers must file quarterly international price reports and certify accuracy; non-compliance can trigger civil monetary penalties up to $100,000 per day.
Q5. How should health insurers update contracts to align with MFN drug pricing?
Payers need to amend specialty-drug fee schedules and insert MFN clauses into provider and pharmacy agreements before Q4 2025 to meet the January go-live.
Previous Alerts
Each week, we email a summary along with links to our newest articles and resources. From time to time, we also send urgent news updates with important, time-sensitive details.
Please fill out the form to subscribe.
Note: We do not share our email subscriber information and you can unsubscribe at any time.
Partner with BHM Healthcare Solutions
BHM Healthcare Solutions offers expert consulting services to guide your organization through price transparency & other regulatory complexities for optimal operational efficiency. We leverage over 20 years of experience helping payers navigate evolving prior authorization requirements with efficiency, accuracy, and transparency.
Our proven processes reduce administrative errors, accelerate turnaround times, and strengthen provider relationships, while advanced reporting and analytics support compliance readiness and audit preparation. From operational improvements to strategic positioning, we partner with organizations to turn regulatory change into an opportunity for clinical and business excellence.