How Will MFN’s Effects on Medicare Impact Innovation?

With the launch of TrumpRx earlier this year, Americans got their first taste of how the administration is attempting to implement its most favored nation (MFN) pricing policies. Lindsay Bealor Greenleaf, head of market access policy strategy at ADVI, spoke with Pharmaceutical Executive about the current state of MFN and how the industry expects it to impact operations as more of the policies come online.

Pharmaceutical Executive: How will the MFN impact on Medicare impact innovation?
Lindsay Bealor Greenleaf: What we are most focused on (and most concerned about) is what has been proposed on a mandatory basis for the Medicare program: the physician administered drugs under Medicare Part B and then the pharmacy benefit products under Part D. When thinking about patient access and broader scale stakeholder implications of those two proposals, we're very concerned about the innovation impact that would occur if those two policies are finalized.

One thing they share with the Medicaid policy is that the MFN prices would be achieved through a rebate approach. That takes providers out of The Mix, for the most part, we're not going to have provider impact implications with these MFN policies and Medicare. That's a change from how President Trump's team proposed doing this under their first term.

Back in 2018 and 2020, when they were first talking about MFN, there were going to be some significant provider reimbursement implications included, but that's not on the table. There is a patient access and out-of-pocket concern tied to these policies as proposed today, most notably the Part D MFN (we call it the guard model) that has been proposed. EMS projects that it would result in patient out-of-pocket, with costs going up $3.6 billion over the course of the model. That is a lot of money.

They have complex reasons why this would be, but basically, it has to do with planned bid interactions. So, this is not necessarily something helpful for patients.

These models would hit on Trump's talking points of wanting to address this perception of higher prices here in the US. It would achieve that, but we do have real concerns for what it would mean for patient out-of-pocket costs. And of course, there are the concerns of what it’s going to mean for innovation going forward, with fewer drugs to launch in the future.