Four Reasons Trump’s Drug Pricing Claims Are Bogus
The consumer pricing index’s measure of prescription drug pricing (CPI-Rx) fell by 3.1 percent over the 12 months ending in July, the steepest annual decline since March 1963, according to the Trump White House, which was quick to take credit for this change, citing the president’s Most Favored Nation (MFN) drug pricing policies. Not so fast.
This analysis will detail four reasons not to buy Trump’s latest drug price boast:
I. Unpublished Methods: The White House has not published the methods they used for their bold claims around Trump’s drug pricing records, so their work cannot be independently verified. The first Trump administration cherrypicked data to make CPI-Rx trends look more favorable to them.
II. Unimplemented Policies: Trump’s MFN drug pricing policies are mostly unimplemented and therefore haven’t contributed to changes in the CPI-Rx.
III. Inappropriate Metric: The CPI-Rx is an informative but flawed measure of drug pricing and affordability trends and doesn’t do a good job of capturing what Trump claims to have done: lowering Americans’ spending on high-priced brand drugs. The CPI-Rx doesn’t capture the costliest medicines used in the U.S., separate out price trends in the high-priced brand drug space from those of cheap generic medicines, or adequately account for the ever-rising launch prices of new medicine. CPI-Rx also doesn’t capture drug pricing changes effectuated through manufacturer rebates.
IV. Stolen Valor: To the extent that the trends the White House points out are an accurate portrayal of the data, the CPI-Rx’s decline is more likely due to drug pricing achievements of other Presidents and factors largely outside of Trump’s control.
I. Trump’s claims of record breaking may be misleading.
It is not entirely clear the trends the Trump administration flags are accurate portrayals of the CPI-Rx data.
The administration did not publish the methods they used for their analyses so that their work can be independently verified. For example, because the CPI-Rx is indexed to 1982, the administration would have had to recalculate the index in earlier years to make proper comparisons dating back to the 1960s, and we don’t have information on how this was accomplished. We also don’t know where they started the time cut offs for presidential administrations in their graph comparing Trump’s supposed achievements to other presidents. Team Trump has a history of misleading Americans using CPI-Rx data by for example picking arbitrary baselines that make their achievements look better. Their lofty claims were disproven in the past.
II. Most of President Trump’s MFN programs haven’t taken effect.
Unimplemented, half-baked polices cannot lower drug prices particularly when the drug companies that struck deals with Trump to lower prices have been raising them. In January 2026, the 16 companies that had entered MFN deals with Trump at that time, raised the prices of 272 of their drugs. A Senate investigation found that companies that signed MFN deals with the Trump administration launched new prescription drugs since Trump became president at an average price of $353,000 per year.
Trump’s MFN policy can be broken down into three buckets:
- A handful of Centers for Medicare and Medicaid Services pilot projects.
- The pharma industry’s backroom promises to launch new drugs at MFN price points for all Americans.
- TrumpRx, a consumer-facing website that offers cash pay prices on some medicines.
Here’s a rundown of what those buckets include and a status update on their limited or nonexistent achievements:
- CMS pilot projects
Trump’s CMS pilot projects include GENEROUS, a voluntary Centers for Medicare & Medicaid Innovation (CMMI) pilot to test MFN-based rebate levels for prescription drugs in Medicaid; GLOBE and GUARD, mandatory CMMI pilots to test MFN-based rebate levels for some drugs in Medicare Parts B and D respectively; and the CMS BALANCE and Bridge demonstrations to test expanded access and increased rebates for GLP-1 obesity medicines in Medicaid and Medicare. Notably, these programs do not reset the exorbitantly high price points pharma companies charge Americans outside these pilots for drugs. Instead, they change the amount the government will receive in rebates on purchasers of the drugs in certain circumstances. The drug industry itself has not indicated they expect a major negative impact from these programs.
GENEROUS: CMS has not announced any state participants in the program, and it is not clear whether any state will participate. The deadlines for states to apply and enter into participation agreements for the model were pushed back from July 31, 2026, and August 31, 2026, to Sept. 10, 2026, and Sept. 30, 2026, respectively. Moreover, there is still no public record of which drugs are included in GENEROUS or the discounts achieved by the government on these products.
GLOBE and GUARD: The final rules for GLOBE and GUARD have not been issued. The proposed rules envisioned GLOBE starting Oct. 1, 2026, and GUARD starting Jan. 1, 2027, thus no drug pricing changes have taken place in the United States under these programs. It has also been reported that the 17 major drug companies who entered into secret MFN agreements with the White House are exempt from GLOBE and GUARD. If this is true, the impact of such demonstrations would be extremely limited. Excluding all companies that agreed to MFN deals from GLOBE and GUARD would reduce the potential savings from those pilots by 71%, Thomas Hwang, director of the Cancer Innovation and Regulation Initiative at Harvard Medical School, predicts.
BALANCE/Bridge: Only 1 state has said it submitted a request for application by the July 31, 2026 deadline to participate in BALANCE, which would provide state Medicaid programs access to GLP-1 obesity treatments from Eli Lilly and Novo Nordisk at a cost of $245 per member per month if the states agree to new coverage criteria. Indiana still must take the next step of entering into a state agreement with CMS for the program. State agreements must be executed by Jan. 1, 2027. In Medicare, the BALANCE demonstration project was deferred for at least a year as not enough Part D plans agreed to participate in the program. The 18-month Bridge program commenced in its place in July, is expected to cost the government tens of billions. It is too early for Bridge scripts to show up in the CPI-Rx, but the lower price points the Trump administration negotiated for Bridge wouldn’t be reflected in the CPI-Rx regardless as pharmacies are reimbursed at the wholesale acquisition cost of the drug.
- Manufacturers commitment to launch new drugs at MFN price points
The 17 manufacturers who struck MFN deals with the Trump White House have supposedly committed to tie the prices of new drugs they launch in the U.S. to those in other high-income countries, but we don’t know which of these companies’ drugs this commitment applies to. There also has been no public explanation as to how the administration would effectuate or enforce this plan in the complex and fragmented U.S. health system and the White House has failed to respond to media questions about whether this policy impacted some recent drug launches. Evidence points to drug companies taking steps to game this promise to Trump by, for example, launching drugs first in the U.S. and delaying drug launches abroad so that it can keep U.S. price points high. Meanwhile, the Trump administration and drug companies are working in tandem to pressure other counties to increase their reimbursement rates for medicines, which would make the U.S. MFN price points higher.
- TrumpRx
TrumpRx is the only part of President Trump’s MFN program that is fully underway and the results have been lackluster. That’s in part because most Americans have health insurance and will do better purchasing drugs through their insurance plans. TrumpRx may also cause consumers to overpay on brand drugs, as many of the medicines on the site have cheaper generic competitors available at lower price points. To the extent TrumpRx has had an impact, demand has largely been concentrated in the GLP-1 space, according to July financial filings by GoodRx, a key integration partner for the drug manufacturers offering discounts on the sites. GoodRx also noted that utilization of TrumpRx has not had a material impact on its business, meaning even use of the site for GLP-1s is likely relatively low. While TrumpRx likely gets a bit of credit for getting the cash prices of GLP-1s lower, the manufacturers of the drugs had been steadily lowering the prices before Trump intervened due to competitive pressure from multiple brand name products, compounded alternatives, and a cash-pay marketplace.
III. The Limits Of the CPI-Rx
The consumer drug pricing index is an imperfect way to measure prescription drug pricing trends. It is most useful when attention is carefully given to what it does and does not reflect and is considered in conjunction with other measures of prescription drug price changes. For example, many economists argue the Producer Price Index (PPI) for prescription drugs, which tracks the first price received by a drug manufacturer and reflects a wider range of drugs used in the U.S., is a better measure of drug companies’ price setting behavior. The PPI grew in July.
- CPI-Rx’s sample is a black box and it doesn’t break down trends by therapeutic area, the key metric that matters to patients.
The CPI-Rx measures price changes of drugs purchased at retail, mail order or internet pharmacies through a sampling process. The probability that a drug enters a particular outlet’s sample of prescriptions is a function of both the relative frequency with which it is prescribed and its relative cost per prescription. The Bureau of Labor and Statistics does not publish the products included in its sample, making it hard to definitively pinpoint what is causing shifts in the index. The BLS also does not break down trends by therapeutic areas. Pricing trends by therapeutic areas are more relevant to patients as what matters most to people is affordability in connection to the illness(s) they have. A cheap blood pressure medicine, for example, does a diabetic needing high-cost insulin no good and widespread availability of cheap generics doesn’t help a patient who has a disease with no generic options.
- A declining CPI-Rx does not equal declining patient out-of-pocket costs.
The CPI-Rx reflects the total reimbursement to the retailer from both the patient and all eligible payers, like their commercial or government provided health insurance, so it is not a direct measure of the portion of a drug’s cost paid for directly by a patient (nor the drug company’s list price or what the drug company makes off the sale). Thus, for example, if payers are shifting more of a drug’s cost to consumers, a declining CPI-Rx may not fully reflect the current burden being felt by patients. In 2025, consumer out-of-pocket costs rose for people in commercially insured health plans, Medicaid and for those who paid cash. Medicare beneficiaries’ out-of-pocket costs declined.
- The CPI-Rx doesn’t measure the costs of most high-priced specialty drugs
The CPI-Rx does not include drugs administered and billed by a hospital or physicians’ offices and is unlikely to include drugs purchased at specialty pharmacies. This means the CPI-Rx likely vastly under samples the prices of some of the costliest medicines used in the United States – specialty drugs that often experience the largest year-over-year price growth. In 2021, specialty medicines represented 55% of U.S. drug spending. Health economists have estimated that the under sampling of specialty pharmaceuticals is underestimating the price growth of the CPI-Rx by almost 75 basis points annually.
- CPI-Rx captures changes in both the brand and generic drug space; big shifts often reflect a pricey brand drug becoming subject to generic competition.
The CPI reflects price changes in both brand and generic drugs. When brand drugs lose patent protection and become subject to generic competition, the price often falls sharply and this can have a large impact on lowering the CPI-Rx. Many popular brand drugs lost patent protection in 2025 and the industry is expected to face a $300 billion patent cliff by 2030. Trump cannot take credit for the genericization of branded drugs occurring during his presidency, as he is not responsible for the policies put in place to encourage genericization nor the timing of recent brand drugs’ loss of exclusivity. Generic drugs are typically inexpensive and not the target of Trump’s MFN agenda, therefore a drug pricing metric that focuses on brand drugs alone would be needed to weigh the success of Trump’s policies.
- The CPI-Rx does not adequately capture the pharma industry’s practice of regularly raising new drug launch prices each year.
Finally, the CPI-Rx does not adequately reflect the trend of higher and higher launch prices of new drugs over time. When a new drug comes on the market and is first incorporated into the CPI-Rx sample, BLS does not include any estimate of that drug’s price change in its first time interval as there is no previous price for it. The BLS must wait until a successive price can be observed and at that point it is only measuring the postlaunch fluctuation in price. Thus, if a new higher-priced cancer medicine enters the market and later lowers its price postlaunch, the inflation index would go down even if the U.S. health system is paying more for this new drug compared to older marketed drugs available to treat the same cancer.
IV. Medicare Drug Price Negotiation and What Else May Actually Be Impacting CPI-RX
Policies initiated under other Presidents and other factors outside Trump’s control are more likely to be causing a decline in the CPI-Rx.
In addition to the genericization of expensive branded drugs explained above, other factors that likely contributed to recent declines in the CPI-Rx originated prior to Trump’s current term. Most notably, 2026 was the first year for which drugs with Medicare negotiated prices under the Biden-era Inflation Reduction Act came into effect. The negotiated prices are reflected in pharmacy counter transactions so their price changes would be picked up by the CPI-Rx if they are in the sample captured. The Inflation Reduction Act’s rebate penalties for drug companies that raise prices faster than inflation may also have kept list price growth for some products in check, impacting the CPI-Rx.
A regulatory change that went into effect in 2024 that impacts pharmacy reimbursement may also be pushing the CPI-Rx down. This policy change required post-sale payments known as pharmacy direct and indirect renumeration or DIR to be reflected in prices at the point of sale and requires that the initial reimbursement at the point of sale must be the lowest possible amount a pharmacy could receive for the drug.
Medicaid policy changes have also impacted the prices of some medicines. Starting on Jan. 1, 2024, the 2021 American Rescue Plan signed into law by President Biden, lifted the cap on the total amount of rebates Medicaid could collect from manufacturers due to price hikes. Drug manufacturers that had taken large price hikes subsequently took some steep list price reductions to avoid owing increased rebates from the cap being lifted.