America’s drug pricing crisis is a significant issue, with patients skipping doses and employers shouldering rising health costs. The idea of Most Favored Nation (MFN) drug pricing has gained traction as a potential solution, but codifying it into law could be a mistake.
The Problem with MFN
The appeal of MFN lies in its simplicity, promising lower prices by tying what Americans pay to prices in other countries. However, this approach overlooks the complexities of the US drug pricing system, which is shaped by a middle layer of pharmacy benefit managers, health systems, insurers, and government programs.
These intermediaries, particularly pharmacy benefit managers (PBMs), play a significant role in determining the final cost of prescription drugs. PBMs often prioritize drugs that generate the richest rebates, rather than those with the lowest net cost, which can lead to higher costs for patients and employers.
A More Comprehensive Approach
Rather than relying on MFN, lawmakers should focus on increasing transparency and accountability in the drug pricing system. This could involve requiring PBMs to pass rebates through to patients and employers, curbing spread pricing, and tightening oversight of hospital markups and contract pharmacy expansion.
By addressing the root causes of the drug pricing crisis, lawmakers can create a more effective and sustainable solution. Codifying MFN into law without tackling these underlying issues would be a misguided approach that could ultimately harm patients and employers.
Original reporting: Tampa Free Press — read the source article.
