President Trump's signature threat to force drugmakers into offering Medicare the lowest prices in the world has ended in a whimper, with a regulation that's expected to impact just a handful of manufacturers.

• Yes, but: The legal ramifications of the pricing experiment could be far-reaching.

Why it matters: The policy's fate could fuel future battles over drug price controls, and whether Medicare administrators have the power to overhaul the program's laws.

Driving the news: CMS this week finalized plans for a five-year program that would peg what the government pays for certain physician-administered drugs to prices in other developed countries.

• The idea is similar in spirit to the Trump administration's "most favored nation" drug pricing deals, but in the eyes of some critics was less a pilot program than a wholesale policy change.
• Drugmakers would pay rebates to the federal government if they charge more than an international benchmark.
• The plan would cover a randomly selected group of about 25% of beneficiaries with original Medicare Part B as their primary coverage, whose out-of-pocket costs would also be tied to the international benchmark.

Reality check: The scope of the program that the administration outlined this week is much narrower than what it originally proposed and would deliver a fraction of the originally envisioned savings.

• It's expected to exempt drug companies that already struck MFN pricing deals with Trump.
• "Orphan" drugs for rare diseases, certain cell and gene therapies, plasma-derived products and biosimilars and their reference biological products also are excluded.
• So are drugs selected for Medicare drug-price negotiation.
• All told, the projected savings would be $440 million over five years, compared with the $11.9 billion in last year's proposal. (CMS says total Part B drug spending was $81.9 billion, based on 2025 claims data.)

The administration says the program dovetails with its ongoing efforts to reduce drug costs for Americans and takes aim at increasingly expensive drugs paid for by Medicare Part B that are delivered primarily in a doctor's office or outpatient department.

• "We're taking action to pilot a new approach to lower costs and strengthen the quality of care while preserving medical innovation," CMS administrator Mehmet Oz said in a statement.

But policy analysts portrayed the outcome as a short-term win for pharma:

• "Even $11.9 billion in drug savings is fairly paltry over that amount of time, but $440 million is microscopic and likely means application would be limited to an extremely narrow band of products," Capital Alpha analyst Rob Smith wrote in a note.
• The waivers and product exclusions mean there may be fewer than five companies impacted by the payment model, according to Raymond James analyst Chris Meekins.
• "It is understandable why there was no big White House announcement of the model. CMS substantially narrowed its reach in this demo," Meekins wrote in a note.

The final rule the administration released Wednesday came after months of rancor over the plan, known as the Global Benchmark for Efficient Drug Pricing Model.

• The original proposal drew criticism from an unusual assortment of groups — from conservative taxpayer organizations, which argued the administration was overreaching with price controls, to oncology providers and hospitals that administer cancer therapies under Medicare Part B.
• Patient advocacy groups also argued the plan could disrupt care.

Between the lines: The industry may sue over the legality of linking manufacturers' rebates to foreign prices, analysts warned.

• Meekins said if courts uphold the plan, it would strengthen the case for implementing other Medicare drug price experiments, including for Part D prescription drugs.
• It could also be the prelude to a legal fight over what Medicare can — and can't — do with pilot programs more broadly.

What we're watching: The scaled-back experiment takes effect at the beginning of 2027, absent legal challenges.

• In the meantime, analysts are projecting the effort will have little impact on drugmakers' future earnings.

Caitlin Owens contributed to this report.

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