📢 NEW PUBLICATION ALERT!
A new article has just been published in Health Affairs Forefront:
“Most Favored Nation Drug Pricing Means Anchoring To A Moving Target”
✍️ Authors: Pedro Pita Barros, Giovanni Righetti, and Luís Sá
This article examines the likely consequences of adopting Most Favored Nation (MFN) drug pricing in the United States, a policy designed to tie US drug prices to the lowest prices observed in selected foreign markets.
🔍 Key insights:
• Foreign price benchmarks are not fixed: adopting MFN creates strong incentives for manufacturers and foreign payers to adjust them strategically.
• Manufacturers may respond by restricting coverage in reference countries to smaller patient populations with higher expected therapeutic benefit, allowing them to negotiate higher prices abroad.
• In European and Canadian-style systems, these restrictions are more likely to occur through reimbursement and coverage decisions rather than through reduced consumer demand.
• The authors' modelling suggests MFN could reduce US drug prices by up to 47.4%, but this shrinks to 38.0% if foreign payers accommodate by relaxing cost-effectiveness thresholds, as the UK has already begun to do.
🎯 Bottom line: MFN pricing risks anchoring US drug prices to an international benchmark that manufacturers and foreign health systems have concrete incentives to move, limiting the very price reductions the policy was designed to achieve.
🔗 Read the full article here:
https://www.healthaffairs.org/do/10.1377/forefront.20260429.360820