Page 178 - CW E-Magazine (3-6-2025)

Special Report Special Report

President Trump issues Executive Order for Most- product (GDP) per capita that is at least drug companies in the US, and the Bio- paying their fair share and middlemen
60% of the US GDP per capita. The technology Innovation Organization driving up prices for US patients,” said
Favoured Nation drug pricing model also would have tested a single (BIO), which represent the biotech- Stephen J. Ubl, President and CEO
add-on payment per dose and waive nology industry in the US, criticized of PhRMA in a May 12, 2025, state-
resident Donald Trump issued PATRICIA VAN ARNUM benefi ciary cost sharing for this payment. a plan for MFN drug pricing although ment. “The Administration is right to
an Executive Order recently Editorial Director, (DCAT) The model would have operated for both organizations issued support for use trade negotiations to force foreign
Pto lay out a plan to implement seven years, from January 1, 2021, to the larger policy goal of seeking ways governments to pay their fair share for
Most-Favoured-Nation(MFN) drug pric- If “signifi cant progress” toward December 31, 2027. to lower prescription drug costs in medicines. US patients should not foot
ing as a way to reduce differentials MFN pricing is not made, the Exe- the US. the bill for global innovation. “The US
in drug pricing between the US and cutive Order directs a series of actions However, in December 2020, is the only country in the world that
foreign countries as means to lower the to implement the pricing reforms. a US federal district court issued a PhRMA pointed to the need to ad- lets PBMs, insurers and hospitals take
cost of Rx drugs in the US. What’s the These include: preliminary injunction against the dress drug pricing through higher costs 50% of every dollar spent on medi-
impact of pharma manufacturers?  A rulemaking plan by the HHS implementation of the proposed MFN associated with prices provided by cines. The amount going to middle-
Secretary to impose MFN pricing; drug pricing plan and as result, it was Pharmacy Benefi t Manager (PBMs), men often exceeds the price in Europe.
Seeking drug pricing reforms  Waivers to allow imports from not further implemented. which act as intermediaries between Giving this money directly to patients
An important US policy move developed countries of low-cost consumers and drug manufacturers, as will lower their medicine costs and
occurred on May 12, 2025 with Presi- prescription drugs, as certifi ed by Industry reaction well as other parties in the healthcare significantly reduce the gap with
dent Donald Trump signing an Exe- Congress and implemented by the Both the Pharmaceutical Re- system. “To lower costs for Americans, European prices.”
cutive Order to put into motion a plan FDA Commissioner on a case-by- search and Manufacturers of America we need to address the real reasons US
to implement Most-Favoured-Nation case basis; (PhRMA), which represents innovator prices are higher: foreign countries not BIO pointed to the chilling effect
(MFN) drug pricing in the US as a way MFN drug pricing (see Figure 1). MFN  Enforcement actions relating to that MFN drug pricing would have on
Address Drug Price Differentials Between the US and Foreign Countries
to lower the cost of prescription drugs drug pricing means that the price of a anticompetitive practices on drug • US Secretary of Commerce and US Trade Representative are authorized to take action to ensure product innovation, particularly among
in the US. The premise behind the Exe- drug in the US would be set no higher pricing; and that foreign countries are not engaged in policies or practices that result in US patients paying a smaller bio/pharmaceutical companies,
cutive Order is that the US pays higher than the price of that drug in compa-  Authorizing the US Secretary of disproportionate amount of global R&D, including by suppressing the price of pharmaceutical which it says is already facing head-
prescription drug costs comparative to rable countries, mostly developed Commerce and agency heads to products below fair market vlaue in foreign countries. winds with proposed tariffs. “MFN is
other developed countries and therefore nations. review and consider action on a deeply fl awed proposal that would
assumes a larger share of the costs of pharmaceutical or precursor mate- Enable Direct-to-Consumer Sales at the Most-Favored-Nation Price devastate our nation’s small- and mid-
drugs and that measures should be taken The Executive Order first seeks rials that may be contributing to • Us secretary of health and human services (HHS) is authorized to facilitate direct-to- size biotech companies – the very com-
to reduce the differential in the prices of voluntary price concessions from pharma- global price differentials. consumer purchasing programs for pharmaceutical manufacturers that sell their product is to US panies that are the leading drivers of
prescription drugs in the US compared ceutical manufacturers for lower drug patients at the Most-Favoured-Nation Price. medical innovation in the United States

to other developed countries, where pricing and then outlines a series of Other policy moves for MFN drug pricing and the cornerstone of America’s bio-
prescription drug prices are lower. steps that the Administration would This is not the fi rst time that US technology leadership,” said John F.
Establish Most-Favored-Nation Pricing
take if such voluntary price conces- policymakers have proposed a plan • Within 30 days of this Executive Order (June 11, 2025), HHS Secretary with the Assistant Crowley, President and CEO, BIO, in
“Americans should not be forced to sions are not made, including allowing for MFN drug pricing. The fi rst Trump to the President for Domestic Policy and the Administrator for the Centers for Medicare a May 12, 2025, statement. “…Patients
subsidize low-cost prescription drugs for importation of lower-cost drugs into Administration had proposed a plan for and Medicaid Services to Communicate most-favored-nation price targets to pharmaceutical and families are not a bargaining chip
manufacturers.
and biologics in other developed coun- the US and a rulemaking plan to imple- MFN drug pricing model that was later in a trade war, but that’s exactly how
tries and face overcharges for the same ment mandatory MFN drug pricing. rejected by the courts. Under that pro- If signifi cant Progress Toward Most-Favored-Nation Pricing Not Made they are being treated – fi rst through
products in the United States,” said the posal, MFN drug pricing would have proposed tariffs on our nation’s medi-
May 12, 2025 Executive Order. “Ameri- The Executive Order does not applied to high-cost biologicals and • Rulemaking Plan, HHS Secretary to propose a rulemaking plan to impose most- cines, now with foreign reference pric-
• favored-nation pricing.
cans must therefore have access to the specify what drugs would be subject Medicare Part B drugs (Medicare is the • Waivers To Allow Imports of Low-Cost Rx Drugs, HHS Secretary to consider, and if certifi ed ing in the name of fairness. Researchers
most-favoured-nation price for these to MFN drug pricing, but it calls on US government healthcare program for by Congress, FDA Commissioner to describe circumstances under which waivers would be that spend years developing cures and
granted to import prescription drugs on a case-by-case basis from developed nations with low-
products.” the HHS Secretary, with the Assistant individuals 65 years and older and cost prescription drugs. breakthrough treatments are being pe-
to the President for Domestic Policy Part B drugs refer to limited outpatient • Enforcement Action, US Attorney General and Federal Trade Commission Chairman are nalized and the US is falling behind in
authorized to undertake enforcement action against anticompetitive practices on drug pricing.
The Executive Order directs several and the Administrator for the Centers prescription drugs). • Review of Pharmaceuticals and precursor Materials. US Secretary of Commerce and agency the 21st century biotech race. Mean-
US federal government offi cials – the for Medicare and Medicaid Services, heads to review and consider action on pharmaceutical drugs or precursor material that may while, US medication prices prop up
be fueling the global price differentials.
Secretary of Commerce, the US Trade to communicate MFN price targets, That model would have tested pay- • Potential Modifi cation or Revoke of Drug Approvals, FDA Commissioner to review and middlemen that prevent cost savings
Representative, the Secretary of the in line with comparably developed ing comparable amounts to the lowest potentially modify or revoke approvals granted for drugs, for those drugs that maybe be from being passed on to patients. The
Department of Health and Human nations, to pharmaceutical manufac- price, adjusted for purchasing power, unsafe, ineffective, or improperly marketed. solution is investments that ensure
Services (HHS), and the Commissioner of turers within 30 days of the issuance paid by any country in the Organization the US continues to lead the world in
the Food and Drug Administration – to of the Executive Order or by June 11, for Economic Co-operation and Deve- Figure 1: Key Elements of Us Executive Order for Most-Favored-Nation Drug Pricing medical innovation, and policies that
take certain actions to put into motion 2025. lopment that has a gross domestic Source: White House, Executive Order Issued May 12, 2025. simplify the system.”

178 Chemical Weekly June 3, 2025 Chemical Weekly June 3, 2025 179

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