One week after President Donald Trump signed an executive order to bring back the Most Favored Nation (MFN) idea he introduced at the end of his first term,1,2 HHS announced it is proceeding with implementing the order on prescription drug pricing.3 The goal of the order is to set price targets for pharmaceutical manufacturers for products that do not have generic or biosimilar competition.
HHS Secretary Robert F. Kennedy Jr and CMS Administrator Mehmet Oz, MD, have set the target price of the lowest price in an Organisation for Economic Co-operation and Development country with a gross domestic product (GDP) per capita of at least 60% of the US’s GDP per capita.
“For too long, Americans have been forced to pay exorbitant prices for the same drugs that are sold overseas for far less,” Kennedy said in a statement.3 “That ends today. We expect pharmaceutical manufacturers to fulfill their commitment to lower prices for American patients, or we will take action to ensure they do.”
The Trump administration claims establishing the MFN pricing will reduce the price of drugs by 30% to 80%.1 In his first term, the policy Trump introduced specifically covered Medicare Part B drugs, although it has not been established if this new order covers the same drugs.2
Shortly after the order was signed, the pharmaceutical industry criticized it, with Stephen J. Ubl, CEO of the Pharmaceutical Research and Manufacturers of America, known as PhRMA, redirecting attention to pharmacy benefit managers (PBMs), insurers, and hospitals as the reason prices are high in the US.
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