Taking Stock of Most-Favored Nation Deals: How Have Markets Reacted?
Health Affairs Scholar, 2026
Under the Trump administration’s most-favored nation (MFN) drug pricing initiative, a stated objective is for US patients to pay no more for a drug than patients in other wealthy countries. MFN policies have generally been viewed as potential threats to pharmaceutical company revenues and their incentives to invest in costly research and development activities. In practice, however, the voluntary agreements announced to date have focused primarily on Medicaid and TrumpRx and have also included some tariff-risk protections tied to commitments to invest in US-based manufacturing.
To assess how investors interpreted these developments, Analysis Group academic affiliate Amitabh Chandra, Managing Principal Noam Y. Kirson, Manager John Dooley, and Analyst Alice Ge conducted an event study. The researchers examined stock-price data for the 16 public companies among the 17 manufacturers that had announced MFN agreements. They analyzed market reactions around several milestones, including the administration's April 2, 2025 “Liberation Day” announcement, the July 31, 2025 letters that the administration sent to pharmaceutical manufacturers regarding MFN pricing, Pfizer’s first formal agreement announcement, and subsequent agreement announcements.
In Health Affairs Scholar, the authors report that investors did not interpret the MFN agreements announced to date as materially value-destructive. The strongest market response followed the first MFN deal announced by Pfizer, which generated largely positive reactions across most of the pharmaceutical companies analyzed, likely because the deal was seen as less harmful than initially feared. The authors suggest that the agreements’ relatively narrow focus on Medicaid and TrumpRx, together with the resolution of some regulatory and tariff uncertainty, may help explain market responses. They further caution that future expansion of MFN may lead to different market reactions.