On July 31, President Trump sent formal letters to the CEOs of 17 major pharmaceutical companies, including Pfizer, Merck, Johnson & Johnson, AstraZeneca, Eli Lilly, Sanofi and others. The letters laid out several requirements the companies must meet within 60 days or face unspecified consequences:
- Most-Favored-Nation (MFN) pricing for Medicaid. The price Americans pay must match the lowest price paid in comparable developed nations.
- MFN pricing for new drugs. From the moment of launch, prices for U.S. consumers (including Medicare, Medicaid and commercial payers) must also align with MFN standards.
- Reinvestment of overseas revenues. Companies are expected to return excess profits from abroad to benefit U.S. patients and taxpayers.
- Direct purchasing models. Purchasing will enable direct-to-consumer or direct-to-business sales at MFN prices, bypassing middlemen.
The government warned it would “deploy every tool in our arsenal” if the companies fail to comply.
These letters followed a May 12 executive order titled Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients, which set the policy direction for tying U.S. drug prices to international norms.
A MFN policy was implemented in December 2020 by the first Trump administration, focused on Part B and Part D drugs. If MFN is implemented again, either voluntarily or via government action, it will effectively be an updated version of the previous policy, with an expanded focus on all markets.
Why It Matters in Rheumatology
Many rheumatology treatments—especially biologics for conditions like rheumatoid arthritis or lupus—are expensive. MFN pricing could lower costs, but it might also:
- Limit access to certain medications if manufacturers refuse to sell at lower prices;
- Delay treatment if insurers or government programs negotiate longer; and
- Reduce innovation if drug companies earn less revenue.
The 2020 MFN policy was strongly and successfully opposed by the ACR and partner organizations on the grounds that provider reimbursement at MFN rates would not be enough to cover the cost of acquiring and administering many of the therapies most frequently administered by rheumatologists and thus would lead many of them to operate at a loss or turn away patients. It was ultimately rescinded by the Biden administration in 2021.
The ACR will continue to actively monitor this development and respond as new details emerge on the policy’s potential implementation and impact on rheumatologists and their patients.
The ACR is committed to ensuring drug prices are adequately reduced and that rheumatologists are reimbursed fairly for procuring and infusing various therapies. For further information about the ACR’s advocacy efforts, email the ACR’s advocacy team at [email protected]. ACR/ARP members can also schedule time to meet directly with the ACR’s advocacy team to discuss issues and challenges you are facing.
Key Takeaways
- The Trump administration is giving the pharmaceutical industry 60 days to implement Most Favored Nation prices.
- This policy says the U.S. should not pay more for a drug than the lowest price paid by any other wealthy country.
- Most Favored Nation was previously implemented in December 2020 but successfully opposed by the ACR and other groups.
- The new version of Most Favored Nation will cover Medicare, Medicaid and private markets.
