Medicines for
no one

The Trump administration recently released an executive order directing Medicare and Medicaid drug reimbursement to be based on prices in other countries, using a model called Most Favored Nation (MFN) pricing. While this may sound good, a less flattering name could be the Most Dictatorial Nation model, as other nations’ prices are set by government dictate, not a competitive market. The truth is that MFN is a shortcut to drug shortages, delayed innovation, higher prices, and administrative gamesmanship in the 340B drug pricing program.

While such a drug pricing system is intended to bring down costs – a goal we all can agree on – importing foreign price controls is not the solution. First, government price caps fail to address a primary reason patients pay more for their medications: middlemen in the health care system, including pharmacy benefit managers, or PBMs.

University of Chicago Study states: “When examining public payers such as Medicare and Medicaid, which are the primary focus of most price control efforts, we find that U.S. prescription prices are actually 18% lower than in these nations. These findings challenge the common narrative that U.S. prescription prices are universally higher and suggest that future international comparisons should take into account the full prescription market rather than focusing solely on the costliest segment.”

MFN drug pricing will have a “devastating impact on access to important treatment and medications for millions of older adults”, with Hispanic-Americans disproportionately affected.