Americans are understandably concerned about affordability. From January 2021 through January 2025—the Biden presidency—Americans effectively got poorer as prices rose 21.5 percent while wages went up only 19.9 percent. Once up, prices rarely come down. Thus, even though inflation has returned to more normal levels during Trump’s second presidency, prices were starting from an elevated level, and they remain high.
Recent polls show that health-care costs are tied, with gas prices, as the top economic worry among Americans. Yet few Americans realize that drug prices—a major complaint—are actually falling.
Finally, a reason to check your email.
Sign up for our free newsletter today.
The Consumer Price Index for prescription drugs has either fallen or been flat every month of 2026. The latest inflation data from the Bureau of Labor Statistics show that while the overall CPI rose 3.7 percent year to year, prescription drug prices fell 4.5 percent—the largest year-over-year decline since 1963—and nonprescription prices fell 0.9 percent.
Some of this decline is due to the one-time drop in prices for the ten drugs in Medicare’s negotiation program that took effect in January 2026. But that cannot explain the continued decline in subsequent months.
The Trump administration has pursued multiple policies to bring drug prices down. TrumpRx, launched in February 2026, provides cash-paying patients with large discounts on over 800 drugs, including many of the most popular medicines. Chief among these are the GLP-1 weight-loss drugs. U.S. prescription drug spending surged in 2025, driven by increased utilization of the GLP-1s tirzepatide and semaglutide at approximately $60 billion each. Consumers’ use of the TrumpRx discounts—particularly for GLP-1s—has been a major factor in lowering prescription prices throughout 2026.
Agreements with pharmaceutical companies Eli Lilly and Novo Nordisk reduce the cost of GLP-1 medications for government programs and TrumpRx while expanding Medicare coverage for obesity with a $50 monthly copay. TrumpRx prices are most valuable to uninsured patients and those whose private plans do not cover GLP-1s to treat obesity. (Less than a third of employer-provided health plans cover GLP-1s for obesity.) By providing low, transparent prices to consumers, these programs create downward pressure on drug prices in all insurance plans.
The FDA has announced programs to speed up drug development that will get life-saving medicines to market quicker and at lower cost. First-time generic approvals are an important source of competition for expensive brand-name drugs and bring down prices. There were 91 first generic approvals in 2025 versus 76 in 2024. There were 88 first generic approvals in 2026 through the end of August, so the annual total is well on its way to surpassing that of previous years. Recent research conducted by Congressional Budget Office analysts shows that when a first generic version enters the market, market share shifts rapidly toward this cheaper option, making the drugs more available. In the year of first generic entry, prices fall by a third. Brand-name prescription volumes fall more than 90 percent, while the volume of total prescriptions increases due to substitution of the low-price generic.
Under the Most-Favored-Nation (MFN) initiative, the Trump administration signed agreements with 26 major pharmaceutical manufacturers (covering roughly 89 percent of the branded drug market) to bring Medicaid drug prices down to the lowest rates paid in other developed nations and to launch new drugs in the U.S. at MFN prices. As part of the MFN program, Medicaid programs have already received 1 million free prescriptions of Eliquis, a widely used anticoagulant drug. All 50 states, plus the District of Columbia and Puerto Rico, have applied to participate in the Medicaid MFN program, which the White House Council of Economic Advisors estimates will save taxpayers $64.3 billion over the next ten years.
High prices, largely driven by inflation during the Biden years and the spike in energy costs resulting from the Iran war, remain a worry. But Americans can cheer the declines in drug prices this past year and look forward to future price cuts as Trump administration initiatives are fully implemented.