This week, President Trump issued a new executive order reviving the possibility of enacting the controversial “most favored nation” approach to drug pricing, which would tie the cost of medications in the United States to the lowest prices paid by other developed nations.
While the administration signaled that drugmakers would be expected to comply or face federal action, no specific penalties have been delineated. Major regulatory hurdles and court challenges are likely, and patient advocates warn implementation would likely create interruptions to care.
Advocates Express Concerns
Health care advocates believe that the model may not work as intended and may even raise costs for patients. The National Health Council expressed concern that the policy could lead to delays in access to treatments, reduced treatment options and increased strain on health care providers.
Cancer specialists, in particular, say federal programs could only realize savings if fewer patients qualify for care, or doctors are reimbursed less when they provide treatment.
Even the Centers for Medicare & Medicaid Services, which would be responsible for implementing the proposal identified threats to care when they evaluated the previous proposal, finding nearly one in five Medicare patients could lose access to care.
Legal and Logistical Roadblocks Loom
The drug pricing concept has been introduced before, but has never been implemented. Previous attempts during President Trump’s first term drew strong opposition and were blocked by three federal courts before being rescinded by the Biden administration.
This latest executive order offers few details on enforcement or timelines, though it directs that price targets will be communicated to pharmaceutical companies within 30 days. The order appears to be a multi-faceted attempt to bring down drug prices, as it also encourages the federal government to explore direct-to-patient purchasing and drug importation programs.
Domestic System Incompatible with Overseas Prices
Tying domestic drug prices to foreign benchmarks may seem simple, but it overlooks deep differences in health systems.
Most developed nations negotiate prices through centralized authorities, a model the U.S. does not share. Newer, more effective yet more expensive treatments may not be available in those nations at all. Importing overseas pricing without the corresponding infrastructure could likewise limit access to innovative treatments, especially in oncology and rare disease care, where the U.S. has a global advantage.
Drug Pricing Debate Far from Over
Officials report that the order’s main purpose was to jumpstart negotiations between the Department of Health and Human Services and the drug manufacturing industry. The executive order and its sense of urgency have drawn significant attention; a protracted policy and legal battle is expected. In the meantime, Congress has an opportunity to craft a sustainable, bipartisan solution to lower drug prices without undermining innovation or limiting patients’ access to care.
Regardless of what comes next in the drug pricing conversation, clinicians, patients and advocates need to be ready to provide policymakers with real world examples to inform their decisions and ensure policies don’t hinder patient care and outcomes.
