MFN and IRA’s Impact of Innovation and Global Strategy: Q&A with Dr. Stella Vnook

In early April, President Trump announced plans to impose 100% tariffs on branded pharmaceuticals. However, he also stated that exemptions would be made for pharmaceutical companies that had struck deals with him as part of his most-favored-nation (MFN) initiative.

This move is part of the president’s larger plan to reduce pharmaceutical prices for Americans. While his MFN efforts are targeting how drugs are priced in the US compared to foreign markets, he’s also pressuring pharmaceutical companies to bring more manufacturing to the United States.

While the goal is to reduce the cost burden on US patients, many in the industry are warning that there could be consequences, such as a reduction in innovation and complications for global launches. Dr. Stella Vnook, chair and acting CEO of Kaida BioPharma, spoke with Pharmaceutical Executive about the impact of MFN and other regulatory actions.

Click here for the video version of this interview!

Pharmaceutical Executive: How can prices be reduced for Americans without impacting innovation?
Dr. Stella Vnook: Well, there's a lot of things that we could do. The industry has been trying to reframe the PBM angle. So, we talked about the patients who are paying a lot, but we really haven't tried to unpack the middleman scenario, if you will. We also have to look at how we support innovation.

If we're going to lower the pricing and mandate the price being lower, then where is the money coming in to drive the innovation in this country to avoid this double squeeze? We also can look at price transparency.

I think Lily has done a pretty good job recently with their launch of their GLP-1 direct-to-patient. There is a lot to be done in terms of value-based contracting. I've been in the industry for 25 years. We talked about these contracts with limited success. They're difficult to execute, but there is more that can be done.

Ultimately, we are creating medicine for patients to afford to take them, but how we go about it needs to be meaningful.

PE: What impact could recent US regulatory actions have on global pricing and launches?
Vnook: We're going to have to think of how complicated global launch scenarios will be. It's going to be restructured on where do we launch? How do we price it? Do we even launch in some of the countries that potentially could create disparity between certain global markets where drugs are available or not?

PE: What about the direct impact of MFN?
Vnook: Well, we already talked about and I mentioned some of the things what we could do in before we go down to MFN route. We understand that some of the larger pharmaceutical companies have agreed because there are trade-offs to be made on taxes and other benefits.

If we separate the discussions, maybe to have carve outs for rare disease indications, some of the oncology indications, some of the smaller biotech companies, there could be a place for it to exist in very carefully structured box.

PE: How are US regulatory actions impacting pricing?
Vnook: I'm still trying to reconcile the IRA, so we have those Medicare price reductions. Then we also have the movement of manufacturing in United States, which is obviously more expensive.

We can have a separate debate about, China versus US for manufacturing and the impact to innovation. Then obviously, we have the HR 7837, and MFN. So again, two separate things are happening.

We also have the reduction in NIH funding that's been pretty much stale for the last six months. All of that has created a pretty drastic situation for a lot of startups, and that's the world that I live in and represent.