White House Issues Pharma Directive on MFN Drug Pricing

On July 31, President Trump issued letters to 17 drug manufacturers warning that if the companies did not take certain steps within 60 days to lower prescription drug prices, the Administration would pursue further action. The directive calls for drugmakers to voluntarily adopt a Most Favored Nation (MFN) drug pricing model for all Medicaid patients, tying U.S. prices to the lowest price paid by peer countries.

It also calls on manufacturers to use MFN pricing for newly launched drugs across Medicaid, Medicare, and commercial payers; reinvest foreign revenue gains to lower prices for U.S. patients; and utilize direct-to-consumer and business distribution models for high-rebate, high-volume drugs. This move builds on the President’s May MFN EO and reflects an increasingly hardline approach toward the pharmaceutical industry’s pricing practices.

The President wrote that if drugmakers “refuse to step up” by Sept. 29, his Administration “will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.” While the MFN concept has faced significant pushback from manufacturers, supporters say it could be a critical step toward lowering costs.