President Donald Trump’s most-favored-nation drug policy was always going to do more than change prices.
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policy → favor → prices
It was going to change behavior.
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It → go → behavior
Game theory asks a simple question: When one player changes the rewards and penalties, how will the others respond?
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others → ask → rewards
Change the rules, and you cannot assume everyone will keep playing the same way.
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everyone → change → rules
That is the challenge with most-favored-nation, or MFN, drug pricing.
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That → favor → pricing
Washington can change the benchmark.
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Washington → change → benchmark
But drugmakers, foreign governments, and state Medicaid programs can change their strategies in response.
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drugmakers → change → response
Now we are beginning to see those moves.
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we → begin → moves
The administration has reached MFN agreements with 26 pharmaceutical manufacturers covering 89% of the branded-drug market.
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administration → reach → market
It is also testing international-reference pricing in Medicaid and pursuing similar approaches in Medicare.
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It → test → Medicare
The policy’s premise is straightforward: Americans should not pay more for the same medicines simply because they live in the United States.
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they → pay → States
But a foreign drug price is not a fixed fact.
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price → fix → ?
Once that number can influence what a manufacturer earns in the much larger American market, the negotiation itself changes.
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negotiation → influence → market
When foreign countries move
Britain is the clearest example.
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Britain → move → ?
Under its pharmaceutical agreement with Washington, the British government agreed to increase the net price paid by the National Health Service for prospective new medicines by 25% and to double spending on new medicines as a share of gross domestic product by 2036.
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government → agree → 2036
The agreement also includes protections intended to reduce the incentive for manufacturers to avoid launching medicines in Britain merely because a low British price could become an American benchmark.
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price → include → Britain
America is not simply importing Britain’s price.
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America → import → price
It is helping change the price Britain is willing to pay.
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Britain → help → price
Switzerland shows the other possible response.
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Switzerland → show → response
In August, the Swiss pharmaceutical trade association Interpharma reported that member companies declined to seek routine reimbursement for seven of 22 new innovative medicines between January 2025 and June 2026 because of MFN concerns.
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companies → report → concerns
That is an industry survey, and it cannot prove that U.S. policy caused every missing application.
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policy → prove → application
But the incentive is easy to see: accepting a low price in a country of nine million people becomes less attractive if that price can reduce revenue in the United States.
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price → see → States
When drugmakers move
The manufacturers are not passive either.
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manufacturers → move → ?
Washington now has separate MFN agreements with 26 drugmakers.
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Washington → have → drugmakers
Many details of those agreements remain undisclosed, which makes their ultimate effect difficult to measure.
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effect → remain → agreements
But a new Lancet analysis shows why those agreements could matter.
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agreements → show → ?
Researchers examined 195 brand-name medicines accounting for $87.9 billion in Medicare spending.
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Researchers → examine → spending
They estimated that the proposed GLOBE and GUARD international-reference-pricing models could reduce net Medicare spending by $5.2 billion and $6.4 billion, respectively.
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models → estimate → billion
But in a scenario in which manufacturers with separate federal agreements were exempt from the models, estimated savings fell by 71.3%.
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savings → estimate → %
That is not evidence that 71% of the savings will actually disappear.
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% → disappear → savings
It is a scenario analysis, and the final rules and deal terms matter.
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rules → matter → ?
But it illustrates the next move in the game.
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it → illustrate → game
Faced with mandatory international-reference pricing, a manufacturer has another option: negotiate.
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manufacturer → face → option
Give Washington something it wants — lower Medicaid prices, direct-to-consumer discounts, domestic investment or other concessions — and try to avoid something the company dislikes even more.
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company → give → something
The benchmark changes the company’s strategy.
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benchmark → change → strategy
The company’s response can then change Washington’s strategy.
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response → change → strategy
When states move
Now the states are entering the game.
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states → move → game
On Sept. 18, the Centers for Medicare and Medicaid Services announced that all 50 states, the District of Columbia, and Puerto Rico had applied to participate in the GENEROUS Medicaid model.
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states → announce → model
Forty states and Puerto Rico had signed participation agreements at that point; the others had until Sept. 30 to finalize their applications.
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others → sign → applications
The distinction matters.
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distinction → matter → ?
…and 16 more, not listed.
The Aporia
