Center for Health System Sustainability

In July 2026, the online prediction-market platform Kalshi announced that users would soon be able to bet on the results of in-progress clinical trials. One such “contract” available for wagers, for example, asks whether POLARIS-AD, a phase 3 trial of the experimental Alzheimer’s drug AR1001, will meet its primary end point. Although heavily focused on sports betting, commercial prediction markets have expanded into areas including interest rates, elections, weather, and the Academy Awards. Kalshi is entering the drug-development space with contracts on end points in large, late-stage trials but is considering broadening its scope to include earlier-phase trials and additional outcomes, such as the number of reported adverse events for a drug. Other major platforms, including Polymarket, are also introducing betting on drug development.

Individuals in the US make up less than 5% of the global population but account for half of global drug spending, frequently paying prices 3 to 4 times higher than in peer countries. These high prices strain public budgets and affect patients directly, with 1 in 4 adults reportedly not filling a prescription because of cost.

The Trump Administration has made narrowing the gap between US drug prices and those in other countries central to its health care agenda through what it calls most-favored-nation (MFN) drug pricing. According to the administration, the goal of MFN is not only to lower US drug prices, but also to encourage manufacturers to raise prices abroad so that other countries pay their fair share of the costs of pharmaceutical innovation.

MFN’s emphasis on fairness has powerful political appeal. The pharmaceutical industry has successfully opposed health technology assessment in Medicare by raising concerns about rationing care. It is harder to argue that a drug should cost far more at a pharmacy in Niagara Falls, New York, than at a pharmacy just across the border in Niagara Falls, Canada. The same intuition applies across greater distances: why should a roofer in Frankfort, Kentucky, pay more for cancer treatment than a banker in Frankfurt, Germany?

Importance: Patent protection allows pharmaceutical companies to charge high prices for prescription drugs during periods of market exclusivity, and their expiration usually defines when generic competitors can enter the US market. Patents on drug active ingredients are classified as primary patents, while patents on formulations, methods of use, and delivery devices are nonprimary.

Objective: To evaluate how pharmaceutical patent portfolios for US Food and Drug Administration (FDA)–approved drugs have evolved over time.

Evidence Review: Patents on small-molecule drugs approved by the FDA from 1990 to 2019 were examined and assessed for changes in the number and types of patents per product. The additional duration of total patent exclusivity associated with each patent type was quantified, and how often patents of each type were enforced against generic manufacturers in litigation was determined.

Findings: The FDA approved 1981 small-molecule drugs during the study period, and manufacturers listed 10 940 patents on these drugs. The mean number of patents per drug increased from 2.1 in 1990 to 6.9 in 2019, driven primarily by nonprimary patents. The mean number of nonprimary patents per drug rose from 1.2 in 1990 to 5.6 in 2019. Nonprimary patents represented majorities of FDA-listed patents (84% [9236/10 940]) and litigated patents (87% [4586/5253]). Nearly all patents listed after drug approval were nonprimary (96% [4874/5064]), and these patents extended market exclusivity by a mean of 6.1 years (SD, 5.8 years) and a median of 4.7 years (IQR, 0.2-10.1 years).

Conclusions and Relevance: Pharmaceutical patent portfolios have grown over the last 2 decades. These portfolios have largely been built on nonprimary patents, which are then enforced against generic firms at higher rates than primary patents. Large patent portfolios can complicate routine generic competition and prolong periods of high drug prices.

Most-favored-nation (MFN) pricing is central to the Trump administration's prescription drug agenda. It aims to prevent drug companies from charging higher prices in the United States than in other developed countries. In December 2025, the Centers for Medicare and Medicaid Services proposed 2 mandatory MFN demonstration models: GLOBE for Medicare Part B and GUARD for Medicare Part D. Both models would require manufacturers to pay Medicare rebates when US prices exceed international benchmarks.

The administration has separately announced voluntary MFN agreements with 26 drug manufacturers under which participating companies provide MFN pricing in Medicaid, offer direct-to-consumer discounts, make launch-price commitments, and invest domestically.3 The agreements also appear to exempt participating manufacturers from other federal pricing initiatives, including GLOBE and GUARD. At least 10 manufacturers have publicly disclosed or confirmed exemptions from Medicare pricing demonstration models in securities filings, investor disclosures, earnings calls, and comments to the Centers for Medicare and Medicaid Services. Some explicitly identify GLOBE and GUARD as covered exemptions. The administration has neither confirmed nor denied these exemptions but has explicitly reserved discretion to exempt manufacturers participating in other drug pricing initiatives.

Despite concerns raised by commentators and legislators, the administration has released no estimate of the impact on the model-eligible spending base if the 26 manufacturers with voluntary agreements are exempted from GLOBE and GUARD.

In this study, we estimated the 2024 Medicare spending base on drugs meeting the proposed criteria for GLOBE and GUARD and quantified the share from products marketed by manufacturers with voluntary MFN agreements.

President Donald Trump has made lowering prescription drug prices a signature issue during both his administrations. Until recently, however, he had relatively little to show for it. During his first term, Congress did not enact major drug-pricing legislation, and his executive initiatives on drug importation, international reference pricing in Medicare Part B, and rebate reform in Medicare Part D were left unimplemented.

The second Trump administration has pursued a broader, more aggressive “most-favored-nation” (MFN) drug pricing agenda, seeking to peg US prices to international benchmarks and thereby import lower prices paid abroad. Its initiatives include the Global Benchmark for Efficient Drug Pricing (GLOBE) model and the Guarding US Medicare Against Rising Drug Costs (GUARD) model, mandatory MFN reference pricing models for Medicare Parts B and D, respectively; and the GENErating cost Reductions fOr US Medicaid (GENEROUS) model, a voluntary model for Medicaid.

Most public attention, however, has focused on voluntary bilateral agreements with 17 drug companies representing 86 percent of branded drug sales. Announced between September 2025 and April 2026, these agreements include price concessions, commitments to sell drugs through direct-to-consumer channels (such as the administration’s TrumpRx website), and investments in domestic drug development and manufacturing (exhibit 1).

The significance of these deals is disputed. The White House touts them as “the most significant actions ever taken” to lower drug prices. Critics, such as Senator Ron Wyden (D-OR), have called them “a sham that benefits pharmaceutical corporations while offering little to no savings to patients and their families.”

Factors influencing the timing of regulatory submission for new drugs across countries are poorly understood. We identified all new drugs approved by the Food and Drug Administration (FDA) or European Medicines Agency (EMA) during the period 2014–18 and tracked their regulatory submissions to the US, the European Union, Canada, Japan, and Australia through 2022. We assessed whether disease area, orphan status, therapeutic value, market size, and launch price were associated with submission delays. The FDA received the highest proportion of first submissions (70 percent). Median submission delays ranged from zero months (FDA) to 18.5 months (Australia). The range of median regulatory review times was small (9.2–14.1 months) compared with the range of median submission delays. Drugs with moderate-to-high therapeutic value were associated with a six-month earlier submission time compared to drugs with low therapeutic value, on average. Higher-price drugs were associated with earlier submission, on average. Overall, cross-national differences in drug availability largely reflected differences in submission, not regulatory review, times. Although the US had greater and faster availability of novel therapeutics, the difference was smaller for drugs that offered moderate-to-high therapeutic value.