Member Login
Search

LUGPA Policy Update:
White House Advances Most-Favored-Nation (MFN) Drug Pricing Initiative

On July 31, 2025, the White House unveiled a comprehensive initiative to lower prescription drug prices in the United States by aligning them with prices in other developed nations. This initiative, detailed in letters sent to 17 major pharmaceutical manufacturers, proposes a Most-Favored-Nation (MFN) pricing framework and seeks voluntary industry cooperation to implement it.

Key Components of the MFN Policy

  • Medicaid MFN Pricing: Manufacturers are urged to offer Medicaid patients in the U.S. the lowest prices available internationally, ensuring cost parity for this critical program.
  • International Price Parity Commitment: For new drugs, manufacturers must pledge not to offer lower prices in other developed nations compared to the U.S., promoting equitable pricing globally.
  • Direct-to-Consumer Distribution: Manufacturers may bypass intermediaries and sell medications directly to patients, provided prices do not exceed the lowest available in peer nations.
  • Trade Policy Incentives: The Administration plans to leverage trade policies to encourage higher international prices, with the expectation that resulting revenues will be reinvested to lower costs for U.S. patients and taxpayers.

The White House has signaled that non-compliance may lead to additional regulatory or legislative measures to address what it calls excessive domestic drug pricing. The targeted manufacturers include AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron, and Sanofi.

Why It Matters

The MFN pricing initiative could reshape the U.S. prescription drug market, impacting pricing, distribution, and reimbursement processes. While the policy aims to reduce out-of-pocket costs for patients and alleviate financial burdens on Medicaid, it introduces potential challenges for healthcare providers, particularly independent practices. Key concerns include:

  • Reduced Margins: Lower drug prices may compress profit margins for practices reliant on in-office dispensing or administration.
  • Access to Therapies: Pricing reforms could limit availability of certain medications, particularly physician-administered therapies.
  • Site-of-Service Shifts: Direct-to-consumer models may disrupt traditional care delivery, raising operational and continuity-of-care concerns.
  • Reimbursement Uncertainty: Changes in pricing could affect reimbursement structures, complicating financial planning for practices.

This initiative builds on the May 2025 Executive Order, “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” which directed federal agencies to explore strategies for aligning U.S. drug prices with those in peer nations. The White House highlights that U.S. patients currently face significantly higher drug costs than their counterparts abroad, placing an undue burden on American consumers and taxpayers.

LUGPA is reviewing the proposal's potential implications for specialty care providers, particularly in-office dispensing and administration of advanced therapies. We will continue to monitor this issue and advocate for policies that ensure both affordability for patients and sustainability for independent physician practices.