After decades of prescription drug prices rising faster than inflation, new data from the Bureau of Labor Statistics offered some rare positive headlines on affordability. In 2025, prescription drug prices fell by an average of more than 3%, the first time this has happened since 1963. It’s good news for patients across America, and the outlook for 2026 price adjustments is equally positive. Prices have declined every month so far this year, a clear sign of market progress. Less clear is what’s driving the decline in prices and who can take credit for it — and in Washington, someone always wants to take credit.
If a Democrat were still in the White House, they would no doubt point to the Inflation Reduction Act, which took full effect this January. The Trump administration wasted no time linking the drop in drug prices to its so-called most-favored-nation policy, a top priority of the president since the February State of the Union address, in which he called on Congress to codify MFN into law.
The White House also called its TrumpRX website “revolutionary” and said it was responsible for $700 million in prescription savings related to fertility drugs, insulin, inhalers, and cholesterol medications. But TrumpRX doesn’t “generate” savings; it simply lists already existing deals from pharmaceutical manufacturers. It’s a discovery tool for direct-to-consumer offers. MFN policies have yet to be truly enacted.
So did the government actually bring drug prices down, or are there other factors being ignored here? A closer look at TrumpRX provides some answers.
On the site, the largest savings in volume arise from fierce competition for market shares in the anti-obesity medicine segment. Eli Lilly and Novo Nordisk both jockey for leadership here and have developed direct-to-consumer models to reach patients whose insurance does not cover GLP-1 drugs. Given the number of GLP-1 patients in the United States and price cuts sometimes in the 70% range, patients saw massive benefits.
This model also cuts out middlemen such as pharmacy benefit managers and, unlike list prices, shows the actual price patients pay for these drugs. The White House took these market-driven price competitions and simply compiled a website.
Another factor is that in 2025, the Food and Drug Administration approved about 10% fewer drugs than in the two previous years. Several gene therapies, usually costly but only needed once in a lifetime, were rejected by the FDA. These therapies could save the lives of young patients born with rare hereditary diseases. While decisions to block the approval of expensive gene therapies mean lower drug expenditures in the short term, they also are a death sentence for patients who don’t have years to wait for a new FDA leadership.
Unfortunately, healthcare in the U.S. continues to get more expensive each year. While drug prices are falling, healthcare provision and insurance premiums are headed in the opposite direction.
A myriad of reasons can be given for this. Emergency physician Colleen Smith recently appeared on the Health Policy Podcast and broke down the unintended consequences of the No Surprises Act, which led to so-called “upcoding” by medical providers. She makes the point that hospitals try to make patients look sicker and submit higher claims to insurers, who, in turn, move to recoup these costs through higher premiums.
Even after removing the patient from the initial equation, the final bill still comes to us. Four out of every five dollars spent in U.S. healthcare are for services, not prescriptions.
At the end of the day, however, drug prices are coming down, and this is objectively great news for most patients. Competition, patient choice, and often simple innovations are all it takes to push prices downward over time. When you look at the chart for the prescription drug consumer price index for each administration going back to Nixon, you get that sense that these things do take time — years, not news cycles. All it takes is one breakthrough to send positive ripples through the entire healthcare system.
The focus of every administration should be to enable and incentivize medical and pharmaceutical innovations — and that’s precisely what MFN policy doesn’t do.
Fred Roeder is a health economist and managing director of the Consumer Choice Center.