Administration Pursued Direct Drug Price Negotiations
Pharmaceutical manufacturers must navigate new payment models and regulatory tools as the administration bypasses traditional rulemaking to secure rebates.
Updated on Sept. 22, 2026 in Healthcare
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Former VA Secretary David Shulkin recently detailed how the administration is utilizing executive authority to negotiate direct pharmaceutical price reductions. The strategy leverages new CMS payment models and FDA regulatory tools to achieve these cost outcomes.
Why it matters
By bypassing traditional rulemaking, the administration aims to secure swift, politically significant price cuts from manufacturers. Operators must now monitor these evolving CMS models and FDA shifts to anticipate potential impacts on drug pricing and market access.
The administration is targeting a 100% potential drug price reduction threshold compared to previous baseline costs. These efforts involve major pharmaceutical companies, including AstraZeneca, Eli Lilly, EMD Serono, Novo Nordisk, and Pfizer.
The players
David Shulkin
Former Secretary of Veterans Affairs during the first Trump administration who provides industry insight on government healthcare strategies.
AstraZeneca
A global pharmaceutical company that produces medicines for oncology, cardiovascular, and respiratory conditions.
Eli Lilly
A major pharmaceutical firm focused on the development of innovative medicines for diabetes, oncology, and immunology.
Novo Nordisk
A global healthcare leader known for its diabetes care products and expanding portfolio in chronic diseases.
Pfizer
A large-scale pharmaceutical corporation that develops and manufactures vaccines and therapeutic drugs.
The details
The administration is currently employing a strategy of direct negotiation with pharmaceutical manufacturers to force price concessions. By utilizing executive authority instead of traditional rulemaking, officials are deploying specific frameworks such as the GLOBE model for Medicare Part B, the GUARD model for Medicare Part D, and the GENEROUS model for Medicaid. Additionally, the FDA has introduced a generative AI tool known as Elsa to streamline regulatory oversight and support these pricing shifts.
Timeline
The FDA launched the generative AI tool Elsa in 2025.
David Shulkin addressed pharmaceutical executives on Tuesday, September 22, 2026.
Market Landscape
The current focus on direct drug price negotiations extends the strategy originally signaled by the creation of the TrumpRx website. This approach marks a significant shift toward using executive-led pricing models rather than reliance on traditional legislative or regulatory procedures.
Business operators in the pharmaceutical supply chain should prepare for increased volatility in pricing as CMS models like GLOBE and GUARD are finalized. Companies should review their exposure to Medicare and Medicaid benchmarks to determine how direct negotiation strategies might affect their revenue margins.
The takeaway
The administration is prioritizing direct negotiations to bypass legislative roadblocks in pharmaceutical pricing. Operators should monitor CMS payment model updates and FDA AI-driven enforcement trends to maintain compliance and competitive alignment.
Further reading
Learn more about evolving industry regulations in our Healthcare section.
Source note: This article includes information reported by MM+M - Medical Marketing and Media.
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