Despite President Trump’s drug pricing agreements with 16 pharmaceutical companies including Pfizer (PFE) and Merck (MRK), all participating firms proceeded to implement price increases averaging 4% in January 2026. This disparity underscores the narrow reach of these voluntary “most favored nation” arrangements, which predominantly target Medicaid programs and cash-paying consumers while leaving broader commercial markets largely untouched.
Key Takeaways
- All 16 Trump deal companies raised some drug prices
- Price increases averaged 4%, matching 2025 levels despite agreements
- Deals mainly impact Medicaid, TrumpRx platform, not commercial insurance
Market Reality vs. Political Theater
The Trump administration’s most favored nation pricing initiative, unveiled amid significant publicity, demonstrates little influence on the pharmaceutical sector’s traditional January pricing adjustments. According to research firm 46brooklyn, drug manufacturers elevated prices on 872 brand-name medications during the initial two weeks of 2026 1.
Pfizer, which became the first company to establish an agreement in September, boosted prices on 72 products, including a 15% increase for its COVID vaccine. Merck similarly raised prices on 18 products, encompassing HIV treatment Isentress and insomnia medication Belsomra 2.
Limited Scope of Agreements
The nine companies featured in the December announcement encompass Amgen (AMGN), Bristol Myers Squibb (BMY), Boehringer Ingelheim, Genentech, Gilead Sciences (GILD), GSK (GSK), Merck (MRK), Novartis (NVS), and Sanofi (SNY). These organizations pledged to supply medications to state Medicaid programs at internationally competitive rates while providing discounts via the TrumpRx platform scheduled to launch in early 2026 3.
“The real truth serum is what’s happening in the marketplace after those deals occur,” said Antonio Ciaccia, CEO of 46brooklyn. “January is prime time for list price changes on brand-name drugs. So in examining where we are today, we’re pretty much in line with the last few years” 1.
Actual Price Movements
Although most medications experienced increases, several significant reductions resulted from Medicare price negotiations launched under the Biden administration’s Inflation Reduction Act. Novo Nordisk’s insulin product Fiasp underwent a 75% commercial price reduction, while AstraZeneca’s Farxiga and Bristol Myers Squibb’s Eliquis experienced decreases ranging from 37% to 44% 1.
The companies jointly committed more than $150 billion toward domestic research, development, and manufacturing in return for three-year exemptions from proposed pharmaceutical tariffs 4.
Industry Response and Future Impact
White House spokesperson Kush Desai minimized the importance of list price increases, highlighting that the agreements concentrate on specific Medicaid discounts and cash-paying customers instead of commercial insurance markets. Dr. Ben Rome of Brigham and Women’s Hospital observed that “those deals probably are not very important in terms of manufacturer drug pricing and the prices paid by most Americans for prescription drugs” 1.
The administration revealed plans to request congressional legislation supporting its Great Healthcare Plan, with Dr. Mehmet Oz asserting it would “codify” the negotiated pharmaceutical company agreements 1.
Market Outlook
The continuing price increases despite prominent political agreements indicate that substantial pharmaceutical cost reduction demands more comprehensive regulatory intervention than voluntary corporate pledges. Medicare’s direct price negotiation demonstrates greater effectiveness in achieving actual reductions, as shown by the 38% to 79% decreases for 10 drugs in the program’s initial round 1.
Investors should observe whether the restricted scope of these agreements impacts the companies’ capacity to preserve pricing power in their primary commercial markets, where the majority of revenue originates.
Not investment advice. For informational purposes only.
References
1Sydney Lupkin (January 16, 2026). “Trump struck deals with 16 drug companies. But they’re still raising prices this year”. NPR. Retrieved April 2, 2026.
2Annika Kim Constantino, Elsa Ohlen (December 19, 2025). “Nine of the largest pharma companies ink deals with Trump to lower drug prices”. CNBC. Retrieved April 2, 2026.
3“Fact Sheet: President Donald J. Trump Announces Largest Developments to Date in Bringing Most-Favored-Nation Pricing to American Patients” (December 19, 2025). The White House. Retrieved April 2, 2026.
4Danielle Valletti (December 19, 2025). “Trump Announces Pricing Deals With 9 Drugmakers, Expanding Most-Favored-Nation Drug Pricing Strategy”. Pharmacy Times. Retrieved April 2, 2026.