MFN Goes Mid-Market: Nine More Drugmakers Sign Medicaid Pricing Deals as the September 29 Tariff Deadline Approaches

On August 31, 2026, the White House announced most-favored-nation (“MFN”) pricing agreements with nine additional pharmaceutical manufacturers: Alcon, Astellas Pharma, BeOne Medicines, BridgeBio, CSL, Kyowa Kirin, Sun Pharma, Teva Pharmaceuticals, and UCB. The agreements bring the total number of manufacturers with MFN deals to 26, which the White House says covers 89 percent of the branded drug market. The MFN program had been a large-cap story until yesterday; the 17 manufacturers that received the administration’s July 2025 pricing letters had all signed agreements by late April 2026. With this round, the program reaches mid-sized and specialty companies, including certain companies that were clinical-stage biotechs within the past decade.

The deal terms

Under the agreements, as described in yesterday’s fact sheet, each company will give every state Medicaid program access to MFN prices for drugs made by the company, and will apply MFN pricing to newly launched innovative medicines. The nine companies collectively committed $19.6 billion of investment in U.S. manufacturing. Several will also donate active pharmaceutical ingredients to the new Strategic Active Pharmaceutical Ingredients Reserve. The operative agreements themselves were not released, consistent with the administration’s practice on the earlier deals, and the fact sheet says nothing about what the companies received in return. MFN confidentiality is drawing congressional attention; Senator Elizabeth Warren (D-Mass.) renewed her demand for publication of the deal terms.

The tariff backdrop

Under the President’s April 2, 2026 proclamation on pharmaceutical imports, Section 232 tariffs of up to 100 percent on patented pharmaceuticals and their ingredients took effect on July 31, 2026, for the 17 large manufacturers listed in Annex III. Every other branded manufacturer becomes subject to the same regime on September 29, 2026. A signed MFN agreement, paired with an approved onshoring plan, takes the rate to zero through January 20, 2029. Pre-announcement reporting by Bloomberg, Reuters, and the Financial Times also described exemption from the pending mandatory Medicare pricing models as part of the bargain, although, as noted, the fact sheet is silent on that point. For a mid-sized company importing patented product, the arithmetic ahead of September 29 would seem straightforward: a 100 percent tariff is an existential commercial problem, while Medicaid, for many specialty products, is a modest share of net revenue.

The Medicaid machinery

The Medicaid leg of these arrangements likely operates through the GENEROUS Model (GENErating cost Reductions fOr U.S. Medicaid), the voluntary CMS Innovation Center model launched in January 2026 under which manufacturers extend Medicaid supplemental rebates that bring state Medicaid net prices down to the second-lowest net price in an eight-country reference basket. CMS has extended the state application deadline to September 10, 2026, with state participation agreements due September 30. The manufacturer application deadline has closed. State uptake will determine the ultimate financial significance of these commitments within the Medicaid program.

GLOBE and GUARD still pending at OMB

The voluntary deals sit alongside two proposed mandatory CMS Innovation Center models: GLOBE (Global Benchmark for Efficient Drug Pricing), which would impose international-benchmark rebates on selected Medicare Part B drugs beginning October 1, 2026, and GUARD (Guarding U.S. Medicare Against Rising Drug Costs), which would recalculate Part D inflation rebates against the same benchmark beginning January 1, 2027. Both final rules have been under OMB review since June. October 1 is a month away, so either the GLOBE final rule issues on a compressed schedule or the start date moves in any issued final rule. Any final rule that issues is likely to draw a legal challenge. If the final rules exempt MFN signers, as the pre-announcement media reporting suggests, the models seemingly function as the penalty for holding out rather than a uniform demonstration program across therapeutic classes.

Transactional considerations: planning ahead of September 29

Acquirers and investors should build MFN analysis into diligence, since a target without an MFN agreement or an approved onshoring plan carries quantifiable tariff exposure with a dated trigger. Counsel should also revisit international license and supply agreements: MFN commitments that reference ex-U.S. net prices interact with tiered royalties and transfer pricing in ways the original drafting rarely anticipated. Gibson Dunn attorneys discussed these issues in a recent webcast regarding MFN pricing reforms and implications for dealmaking (here).

What to watch

Pre-announcement reporting suggested a few other companies that would be included in this round of announcements, and Bloomberg has reported that further agreements are in negotiation. The nearer-term markers are state GENEROUS applications on September 10, the second tariff tranche on September 29, state participation agreements on September 30, and the proposed GLOBE start date of October 1.

Gibson Dunn is monitoring these developments closely. Our attorneys are available to assist clients as they assess MFN agreements and the related tariff and disclosure questions. © 2026 Gibson Dunn & Crutcher LLP. All rights reserved. For contact and other information, please visit us at www.gibsondunn.com.