Drug Prices Drop Sharply, But Who Deserves the Credit?

Prescription drug prices in the United States fell 3.1% year-over-year in July 2026, the steepest annual decline since March 1963, according to AP News. President Donald Trump and the White House are taking credit for the drop, attributing it to his “Most Favored Nation” (MFN) drug pricing deals and the TrumpRx website. But drug pricing experts say the reasons behind the decline are far more complex.

The Numbers Behind the Headline

The Consumer Price Index data released by the Bureau of Labor Statistics showed prescription drug prices fell 0.8% in July alone, contributing to the steepest year-over-year decline in more than six decades. Prices for medicinal drugs overall fell 2.7% over the 12 months ending in July, the largest annual drop on record, as The Guardian reported.

The White House has celebrated the figures, calling them evidence that Trump’s policies are working. In a promotional email blast, the administration declared that Trump “promised to slash prescription drug prices — and he has delivered,” as NY Post reported. The White House also pointed to the TrumpRx website, which it said has generated $700 million in savings for patients.

A Complex Picture Emerges

Drug pricing experts, however, caution against attributing the decline to any single policy. “It’s difficult to know in one number what’s going on beneath the hood,” said Juliette Cubanski, vice president and director of the Program on Medicare Policy at KFF, the healthcare research nonprofit. “I don’t think we can attribute this price reduction to any one specific policy change or initiative.”

Several factors appear to be at play simultaneously. The 2022 Inflation Reduction Act, signed by former President Joe Biden, for the first time allowed Medicare to negotiate prices with drugmakers for top-selling prescription drugs. New prices for the first 10 negotiated drugs — including Eliquis, Jardiance, Xarelto, and Januvia — took effect in January 2026, as USA Today reported.

Generic and biosimilar competition has also driven prices down. “When big blockbuster products face generic competition, their prices fall,” said Dr. Benjamin Rome, a health policy researcher at Harvard Medical School. Biosimilar drugs for the autoimmune drug Humira and competition for Stelara have reduced costs for patients.

The MFN Debate

Trump has sought to attribute the drop to his “most favored nation” deals, which aim to bring U.S. pharmaceutical prices in line with those paid by other developed nations. The administration has announced deals with 17 large drug companies covering approximately 86% of the branded drug market, according to the White House.

But experts note that the contracts have not been made public, and the models designed to put MFN policies into practice in federal health programs have not yet gone into effect. “These policies are under development and have not affected payers in the index,” said Stacie Dusetzina, a professor of health policy at Vanderbilt University School of Medicine. “Ultimately, I believe that the change is likely to be more directly related to the IRA’s policies and the Medicare drug price negotiation program than it is to current policies.”

Richard Frank, professor emeritus of health economics at Harvard University, echoed that sentiment: “If I was a betting guy on what mattered most, it would be probably stuff around the Inflation Reduction Act. Trump’s efforts wouldn’t be where I’d place my money.”

Questions About TrumpRx Savings

The White House’s claim that TrumpRx has generated $700 million in savings has drawn scrutiny. Democratic Sen. Elizabeth Warren of Massachusetts questioned the figure in a letter to the administration, noting that Health Secretary Robert F. Kennedy Jr. has admitted the website doesn’t store patient, health, or prescription information. “Without this information, the accuracy of any claim of savings made by the Trump administration is unreliable,” Warren wrote.

Experts have also noted that the CPI measure doesn’t directly reflect what consumers pay — it measures what pharmacies are paid by insurers and consumers. Even as the index shows a year-over-year drop, many Americans may not see the savings in their own budgets.

What It Means for Consumers

While the price decline is real, experts warn that consumers aren’t necessarily experiencing it at the pharmacy counter. “A price measure like the CPI is not going to adequately capture consumers’ experience with healthcare and prescription drugs,” Rome said. Higher health spending and federal policy changes are resulting in higher insurance premiums and out-of-pocket costs for many Americans.

The Trump administration is also ending a Medicare drug subsidy program that helped offset Part D premiums, which could result in higher costs for seniors. Meanwhile, a new policy lowering GLP-1 weight loss drug prices for certain Medicare enrollees went into effect in July, so only its first month is reflected in the data.

As the debate over who deserves credit continues, the Reason analysis notes that prescription prices don’t go up or down with the flick of a president’s pen. The reality is that multiple forces — policy changes, market competition, and administrative actions — are converging to reshape the pharmaceutical landscape. What remains clear is that the 3.1% decline represents a significant shift, even if the full story behind it is still unfolding.