U.S. Push to Narrow Drug Price Gaps with Other Countries

In 2025 the Administration renewed an effort to reduce the gap between U.S. drug prices and those in peer countries, reviving a most-favored-nation (MFN) approach that ties some Medicare payments to lower prices abroad. President Donald J. Trump issued an Executive Order in May that directed agencies to pursue this strategy and to seek commitments from manufacturers. The policy targets list prices for brand-name medicines that lack generic or biosimilar competition and is framed as a means to relieve financial burden on American patients.

HHS and the Centers for Medicare and Medicaid Services have translated the executive direction into specific targets, and letters were distributed to major drugmakers with a September 29, 2025 deadline for commitments. Agencies have prepared a pilot called the Global Benchmark for Efficient Drug Pricing or GLOBE Model, which was sent to the White House for interagency review and will require Office of Management and Budget approval before implementation. If cleared, regulators could use several tools, including reporting requirements and pricing calculations based on selected comparator countries.

While proponents contend that aligning U.S. list prices with lower international prices will directly benefit patients, economic research published in Value in Health and analysis indexed on PubMed caution that international reference pricing can lead to unintended market responses. These studies show that when list prices fall in reference countries, manufacturers sometimes adjust launch strategies or rely on confidential discounts, which could delay patient access abroad and create price convergence. Industry stakeholders have also expressed concerns about investment and supply decisions.

Observers who study global drug markets note that the choice of comparator countries, the specific formula used to calculate targets, and enforcement mechanisms will determine whether the policy meaningfully lowers costs without harming access. Regulatory review by OMB and any formal rulemaking will be important milestones.