Summary

The White House has announced “most-favored-nation” pricing agreements with 26 pharmaceutical companies over the past year. The stated goal is to bring US drug prices closer to prices paid in other wealthy nations. However, a new analysis suggests these deals could work against a separate, larger set of government savings plans already underway. Specifically, an updated estimate from the lead author of a Mass General Brigham study finds that the MFN deals could cut projected Medicare savings by close to 80%. As a result, one pricing policy may be quietly undermining another that was designed to achieve the same goal.

Access Impact

A savings estimate is only as strong as the framework used to calculate it.

Medicare’s GLOBE model, covering Part B drugs, and its GUARD model, covering Part D drugs, were both created following a May 2025 executive order directing federal health officials to bring US drug costs in line with prices paid in other similar nations. GLOBE is scheduled to launch on 1 October 2026, and GUARD on 1 January 2027. Together, the two models were projected to save Medicare an estimated $11.6 billion a year in net drug spending once fully phased in, a reduction of 16% to 18%, according to a Lancet study. This is fundamentally a Budget Impact question: private MFN deals, negotiated company by company outside this reference framework, can shift the baseline those projected savings were built on.

Budget Impact

Two savings claims, one shared baseline.

The MFN deals and the GLOBE and GUARD models were not designed as one coordinated system. Consequently, if a company’s MFN-negotiated price already reflects a meaningful discount, the additional savings Medicare can extract through international reference pricing may shrink. This is not a hypothetical concern; it is the specific tradeoff the updated Mass General Brigham analysis identifies. For anyone modeling long-term drug cost trends, treating the MFN deals and the Medicare pricing models as independent, additive sources of savings would overstate the total benefit to the system.

Evidence Quality and Robustness

Much of this remains difficult to verify independently. The full terms of individual MFN agreements have not been made public, which limits the ability of outside analysts to model precisely how they interact with GLOBE and GUARD. Therefore, the estimated 80% reduction should be read as a directional finding, not a precise forecast. Even so, the underlying mechanism, that undisclosed bilateral deals can interact unpredictably with a public reference-pricing model, is a structural concern that holds regardless of the exact percentage eventually confirmed.

Risk Signal

A savings number without a visible calculation behind it.

For anyone relying on projected Medicare drug savings to model future healthcare costs or portfolio exposure, this is a reminder that policy tools built for the same goal are rarely additive when they are not coordinated. Two pricing mechanisms can quietly work against each other even as both are presented as wins. If a decision maker is asked to defend a savings estimate a year from now, what independent, transparent framework will that estimate actually rest on?

#MarketAccess #HTA #MARArating #DrugPricing

Explore market access for pharma reports: https://mararating.com/market-access-pharma/

Explore the MARA ratings list: https://mararating.com/mara-ratings-list