Newsletter · · Ashutosh Agarwal

Drug Price Deals Now Cover 89 Percent of Branded Pharma - Healthcare Policy: Drug Pricing, IRA & Managed Care - Week of September 7, 2026

Healthcare policy for the week of September 7, 2026: nine mid-tier drugmakers signed Most Favored Nation deals to dodge Section 232 tariffs, lifting MFN coverage to roughly 89% of the US branded market, while the temporary Medicare GLP-1 bridge passed 600,000 enrollees with its permanent successor still on hold.

Healthcare Policy: Drug Pricing, IRA & Managed Care

Week of September 7, 2026: Drug Price Deals Now Cover 89 Percent of Branded Pharma

TL;DR

  • The White House's Most Favored Nation (MFN) pricing push jumped from big pharma to the mid tier this week, and it now covers about 89% of the US branded-drug market. Nine more companies, including Teva, Astellas, UCB, Boehringer Ingelheim, BridgeBio, CSL, Kyowa Kirin and Sun Pharma, signed on, committing nearly $20 billion in US manufacturing (BioSpace, BioCentury This Week).

  • What the deals actually buy the companies is a tariff shield, not a price shock. Signing exempts them from the Section 232 pharma tariffs due to hit in September and, the administration hints, from mandatory MFN pricing demonstrations coming to Medicare Part B and Part D. Big pharma has reported no significant impact to their businesses so far. Veteran policy journalist Steve Usdin's bottom line: the deals are structured so they "don't inflict a great deal of pain on the companies."

  • The real story is the precedent. Usdin argues ad hoc price haggling with the White House and international reference pricing are now permanent features of the landscape, and that if Democrats win a chamber in the midterms, they will subpoena and publish the deals, then push for reference-priced Medicare negotiation that lands below today's prices. That is the structural risk for every tracked name.

  • The Medicare GLP-1 bridge is a hit and a time bomb. Over 600,000 people enrolled since July 1 at $50 a month versus a $1,000+ list price, but it expires end-2027 and the permanent "balance model" it was meant to bridge to has been on hold since April for lack of plan sponsors (On The Pen GLP-1 News, Pharmacy Podcast Network).

  • Lilly (LLY) keeps buying. Its $2.875 billion deal for Merida Biosciences is its 13th takeout of 2026, lifting acquisition spend past $31.5 billion for the year. And Mounjaro just won an FDA cardiovascular-outcomes label, a lever to argue GLP-1s pay for themselves (BioCentury This Week).

  • The setup meaningfully changed for LLY, NVO and BMY.

What's new

1. The MFN net widens to 89% of branded drugs, and the point is tariffs.

The single biggest development of the week. On BioSpace's weekly show, the editors laid out how the Trump administration, having already signed most of big pharma, "is moving down the ladder, this time striking deals with nine midsize companies." As host Jeff Axe put it:

"In total, according to the White House, MFN deals now cover some 89% of the branded drug market... The companies have collectively committed nearly $20 billion in manufacturing investments in the U.S."

The new signers named across BioSpace ("Novartis' and BMS' paused CAR T trials, RevMed's pancreatic cancer approval, more MFN deals," Sept 2) and BioCentury This Week ("Ep. 385 – MFN deals, Lilly takeout, FDA pick Overton," Sept 1) include Teva, Astellas, UCB, Boehringer Ingelheim, BridgeBio, CSL, Kyowa Kirin, Sun Pharma and Alcon, a list that BioCentury's Steve Usdin noted is "really heavy on companies that are headquartered outside of the United States." (Speakers here are specialist trade journalists and a veteran policy analyst, informed press and expert commentary rather than company operators.)

Why they signed matters more than the headline count. Usdin (BioCentury), the most authoritative voice on the beat this week, described two pillars to the mid-tier deals:

  • A tariff exemption. Signing spares them the Section 232 pharma tariffs "set to come into effect in September."
  • A shield from mandatory Medicare MFN pricing. The administration has signaled signers will be exempt from the coming MFN pricing demonstrations in Medicare Part B and Part D, run through the CMMI innovation center. Each company also agreed to give every state Medicaid program access to MFN prices.

The reassuring read, straight from BioSpace: MFN "was at one point considered a major overhang for the industry" but "has faded into the background as these big farmers have not reported significant impacts of these deals to their businesses." One catch the BioSpace team flagged: signing may take a company out of contention for a separate Medicaid demonstration aimed at the same goal.

2. The precedent is the payload, and the midterms are the trigger.

This is the part that should move a thesis. Usdin's framework on BioCentury This Week:

"A precedent has been set... for companies to make ad hoc price negotiations with the White House. Another precedent... has been to use international reference pricing as a benchmark for American prices. I don't think those two things are going away."

His forecast: if Democrats take either chamber in the midterms, "one of the first things they're going to do is going to be to subpoena the companies" for the deals and make them public, revealing that they "don't inflict a great deal of pain on the companies" and "probably don't result in major savings for the taxpayers." That, he argues, would push Congress to impose stiffer controls, adopting international reference pricing as the benchmark for Medicare negotiation, which "would result in lower negotiated prices than the ones that we're seeing today."

He also named the next shoe to drop: the CMMI demonstrations applying MFN pricing to Medicare Part B and Part D. Companies with deals are shielded; the ones "left behind... can be collateral damage" if the demos go live, and if they do, expect immediate litigation from the trade associations. This is the clearest live link this week to the IRA negotiation program itself.

3. The Medicare GLP-1 bridge: 600,000 enrolled, and a 2027 cliff.

Two shows dug into the temporary Medicare GLP-1 "bridge" program for obesity, and the numbers are striking. From On The Pen GLP-1 News ("We're Solving Obesity. Now Who Pays for It?", Sept 2), whose hosts are patient-access advocates:

"Over 600,000 people have already enrolled in a temporary Medicare Bridge program for GLP-1s for obesity. And this thing just started July 1st... it opens it up for $50 a month... This is a program that lasts through the end of 2027."

On Pharmacy Podcast Network ("The Medicare GLP-1 Bridge," Sept 4), BuzzHealth's senior pharmacy director, an operator who works the payment plumbing, added the fine print that matters for modeling:

  • The bridge runs completely outside Part D, with its own prior-authorization and payment system, so "plans that sponsor Part D have no risk in it."
  • The $50 copay does not count toward the deductible or out-of-pocket maximum, so it is $600 a year on top of everything else, for a fixed-income population.
  • Crucially: it "was supposed to be a bridge to a permanent program called the balance model. But as of April of this year, since... CMS has not had enough plan sponsors... they put the balance model on hold for now."

So the good news (real Medicare access at $50) sits on a foundation that has already wobbled. Both shows stressed that the low prices, bridge copays and Lilly Direct / cash-pay discounts alike, are temporary and can change "on a dime."

4. Lilly's 13th takeout of the year, plus a cardiovascular label for Mounjaro.

BioCentury This Week and BioSpace both covered Eli Lilly's ~$2.875 billion acquisition of Merida Biosciences, a four-year-old Cambridge startup with a Phase 1 antibody-clearing platform targeting Graves' disease and thyroid eye disease. BioCentury analyst Lindsay Martin's tally:

"This is Lily's 13th takeout of the year. And so far on acquisitions alone, they've spent at least $31.5 billion in total. And of that, at least $22.6 billion has been in upfront payments."

It is Lilly's fourth immunology deal of 2026. Separately, On The Pen flagged that on Friday Mounjaro won a new FDA indication for reducing cardiovascular death, heart attack and stroke in high-risk type 2 diabetes, off a 13,000-patient, four-year outcomes trial that showed benefit versus Trulicity. That is a strategic lever: it lets Lilly argue the drugs' downstream savings, "ambulance rides, emergency department visits, hospitalizations, cardiac procedures," justify the price.

The debate

The core argument on this beat, a bounded, well-modeled headwind versus a structural squeeze on US branded-pharma margins, got real new fuel this week, and both sides got stronger.

"It's manageable, priced in, and mostly optics."

  • MFN "has faded into the background" because big pharma reports no material P&L impact (BioSpace).
  • The mid-tier deals are, functionally, a way to dodge Section 232 tariffs and the Medicare MFN demos, a defensive trade rather than a giveaway (BioCentury This Week).
  • Usdin's own read is that the deals are built so they "don't inflict a great deal of pain on the companies" and yield little taxpayer savings, toothless by design.
  • Where MFN pricing does bite hardest is Medicaid, a lower-margin channel.

"It's structural, this is the on-ramp to real price control."

  • The two precedents now baked in, White House price negotiation and international reference pricing, "are not going away" (BioCentury This Week).
  • A Democratic midterm win likely exposes the deals as weak and pushes reference-priced Medicare negotiation below current levels, a direct hit to the IRA-negotiated franchises.
  • The Part B/Part D MFN demos are still coming; unsigned companies become "collateral damage."
  • On the commercial side, the floor is eroding on its own: employers are dropping GLP-1 coverage (Starbucks, PepsiCo, and per the PBM panel, Cigna/Aetna), and compounded/direct-to-consumer versions run "90% cheaper," cutting realized prices "in half, if not by more" (Becker's Healthcare Podcast).

Net: the near-term earnings math still looks contained, but the week added weight to the bear's structural case. The scaffolding for tougher, reference-priced controls is being poured now.

Stocks in play

Eli Lilly (LLY)

  • Bull: Signed an MFN deal (tariff overhang lifted); Mounjaro's new cardiovascular label strengthens the payer argument and widens the addressable population; $31.5B of 2026 M&A is diversifying beyond GLP-1s into immunology. The Medicare bridge is pulling 600,000+ new Medicare patients into branded GLP-1s.
  • Bear: Advocates are openly pressing Lilly to cut cash-pay prices "to 250 for the top doses" from ~$500 to fight compounders (On The Pen); Lilly Direct and bridge prices are temporary; employer coverage is contracting.
  • Watch: Whether the permanent "balance model" revives before the bridge expires end-2027; Mounjaro CV-label uptake; the next CMMI Part B/D MFN demo announcement.

Novo Nordisk (NVO)

  • Bull: Ozempic alone did "roughly $12 billion in the US in 2025" (Daybreak); the MFN deal removes the tariff cloud; ex-US expansion is underway.
  • Bear: Same cash-pay pressure as Lilly; compounding and DTC channels undercut the brand; the India playbook shows how hard it is to replicate US-style pricing and coverage abroad.
  • Watch: Any move on cash-pay list prices; balance-model status; compounding enforcement (the FDA quietly tightened multi-dose-vial language this week).

Bristol Myers Squibb (BMY)

  • Bull: MFN deal signed, tariff risk off the table.
  • Bear: Paused several CAR-T trials in autoimmune disease after "concerning safety signals" on its therapy ZolaCel; still facing a patent cliff and declining revenue with no AstraZeneca mega-merger to solve it (that deal "never materialized") (BioSpace).
  • Watch: Clarity on the CAR-T pauses; BMS's standalone plan for the cliff.

AstraZeneca (AZN)

  • Bear: At the European Society of Cardiology, its TTR silencer Wainua (with Ionis) posted a "clearly worse than expected" ATTR cardiomyopathy result, a hazard ratio of 1.14, meaning a 14% higher rate of cardiovascular death and events versus comparator. Analysts now expect oral stabilizers from BridgeBio and Pfizer to hold the first-line spot (BioSpace).
  • Watch: Whether AZN and Ionis salvage a monotherapy path; competitive share in ATTR-CM.

Merck (MRK)

  • Neutral to positive: Its oral PCSK9 inhibitor Lipfendra (enlicitide) was the fastest approval under FDA's new priority-voucher pilot, "24 days from submission to approval" (BioCentury This Week).
  • Watch: Small-molecule pipeline pace; any Keytruda formulation-risk chatter.

Teva (TEVA)

  • Read-through: Among the mid-tier MFN signers, relevant for the generics and biosimilar complex (see Read-throughs).

Pfizer (PFE)

  • Tangential positive: Its oral ATTR-CM stabilizer is expected to stay first-line after the Wainua miss (BioSpace). Its IRA-exposure setup, along with JNJ's and AbbVie's, is unchanged.

Read-throughs

  • PBMs and managed care (CVS, CI, UNH): The pressure narrative intensified. On Becker's Healthcare Podcast ("Lowering Drug Costs: Rethinking PBMs," Sept 2), RxUtility's Miriam Paramore, an operator in the pricing-transparency business, said PBM reform now forces "true rebate pass-through to the point of sale," but only if the self-insured employer opts in, and enforcement is weak. Bioethicist Ezekiel Emanuel went further: "If you change the pricing system so that all the drugs in a class have the same price... you don't really need the PBM function." Add employers dropping GLP-1 coverage and members routing around insurance to cash and DTC channels, and the middleman's value proposition is under real narrative fire.

  • Biosimilar and generic makers (including Teva): Teva signed an MFN deal. On 340Banter ("Washington Contract Pharmacy Protection Bill," Sept 3), UniteCare Northwest's chief pharmacy officer Lisa Nelson noted that manufacturers' steep 340B discounts "stem largely from inflationary penalties when they raise prices faster than inflation," a reminder of how price-hike restraint feeds directly into the 340B discount pool.

  • 340B providers and hospitals: 340B Insight ("How Hospitals Can Wrangle 340B Data," Aug 31) featured operators from 340B Health and St. Francis Health System on the compliance crunch from "compressed reporting cycles" for 340B rebates and manufacturer data submissions, the operational cost of the rebate-model shift landing on hospitals.

  • Small-molecule versus biologic R&D mix: Merck's record-fast oral PCSK9 approval is a data point that the small-molecule cardiometabolic path is still very much alive.

  • Ex-US launch and pricing: Daybreak ("India got cheap Ozempic. No one knows how to sell it," Sept 1) is a case study in why US GLP-1 economics do not travel. India's entire GLP-1 market was only ~$220–230 million in the year to May 2026, roughly what Ozempic earns in the US in a single week. With ad bans, thin insurance, and Lilly's "Your Peak" (via Cipla) costing 12,000–24,000 rupees a month (up to 20–60% of a middle-class household's income at top doses), Novo and Lilly are pushing into Tier 2 and Tier 3 cities with no pricing lever to pull.

What changed vs. last week

This week delivered the biggest policy development in a while: MFN coverage vaulting to 89% of branded drugs as nine mid-tier companies signed on ($20B in US manufacturing commitments), with the explicit logic being tariff and Medicare-demo exemption. Add fresh, hard numbers on the Medicare GLP-1 bridge (600,000+ enrolled, balance model on hold since April), Lilly's 13th deal of the year, Mounjaro's new cardiovascular label, AstraZeneca's Wainua failure, and a sharper PBM-reform read-through.

The calendar markers carried over from prior coverage still stand: the August 31 Medicare outpatient-payment-rule comment deadline has now passed, and the January 1, 2027 340B rebate model go-live remains the concrete, dated catalyst on this beat. The new near-term thing to watch is any CMMI announcement putting MFN pricing into Medicare Part B and Part D.