Congress is considering making Most-Favored-Nation (MFN) drug pricing a permanent law. However, this could have unintended consequences, such as weakening U.S. biomedical innovation and complicating patient access to medicines.

The Concerns with MFN Drug Pricing

MFN attempts to lower U.S. drug prices by tying them to prices in other countries. However, this approach does not address the underlying market failures that drive up drug costs. Instead, it could reduce the expected returns on high-risk research, leading to fewer therapies and slower launches of new medicines.

The U.S. has a unique system for drug development and pricing, which is different from other countries. Importing foreign price controls could disrupt this system and have negative consequences for patients. For example, countries with limited resources may lose access to lower-priced medicines if their prices become inputs into an American price-control formula.

A Better Approach

Rather than adopting MFN, policymakers should focus on increasing transparency in the drug supply chain, ensuring that negotiated savings are passed through to patients, and strengthening generic and biosimilar competition. They should also support domestic biotech research and target affordability assistance to patients facing high out-of-pocket costs.

By taking a more nuanced approach, Congress can lower drug costs while preserving innovation and ensuring that patients have access to the medicines they need.

Original reporting: Tampa Free Press — read the source article.