Trump gives pharma ultimatum on most favoured nation pricing
President Donald Trump has given leading pharma manufacturers a 60-day deadline to come up with a most favoured nation (MFN) approach to drug pricing, or face consequences.
Trump has sent letters to top executives at 17 drugmakers, ordering them to provide medicines at MFN prices "to every single Medicaid patient." If they refuse to comply, the President has threatened to "deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices."
In May, the White House revealed its intention to introduce a pricing policy that would set medicine prices at the lowest price in an OECD country with a GDP per capita of at least 60% of the US GDP per capita.
Letters have now been sent to AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Genentech, Gilead, GSK, Johnson & Johnson, Merck & Co (MSD), Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi.
According to the White House, manufacturers will have to guarantee that they will not offer other "developed nations" better prices than the US, while the federal government will implement policies that will support them in raising prices internationally – provided the resulting increased revenues are reinvested into lowering US prices.
Moreover, the aim is to provide drugmakers with "an avenue to cut out middlemen and sell medicines directly to patients" – an avenue that is already being explored by some companies – but only if they do so at MFN prices.
Trump has given the companies until 29th September to respond to the demand with firm commitments to meeting those objectives, saying their efforts so far have fallen short.
"In case after case, our citizens pay massively higher prices than other nations pay for the same exact pill, from the same factory, effectively subsidising socialism…abroad with skyrocketing prices at home," he said.
"So we would spend tremendous amounts of money in order to provide inexpensive drugs to another country. Moving forward, the only thing I will accept from drug manufacturers is a commitment that provides American families immediate relief from the vastly inflated drug prices and an end to the free ride of American innovation by European and other developed nations."
A Department of Health and Human Services (HHS) document published in January cited RAND data which found that US prices across all drugs – branded and generic – were nearly 2.78 times as high as prices in comparison Organisation for Economic Co-operation and Development (OECD) countries, and at least 3.22 times as high after adjustments for estimated US rebates.
The Pharmaceutical Research and Manufacturers of America (PhRMA) industry body said recently that the MFN policy is not the way to lower drug prices, arguing that tackling middlemen like pharmacy benefit managers (PBMs) and pressing trade partners to spend a set share of their GDP on new innovative medicines is the way forward.
Photo by Juliana Kozoski on Unsplash
