HHS to Impose Prices on Specific Pharmaceuticals
The Department of Health and Human Services announced that it has begun to implement President Trump’s executive order imposing so-called “Most Favored Nation” price controls on pharmaceuticals.
The EO: The president’s EO directed HHS to propose a plan to impose price controls that tie drug prices in the U.S. to those in foreign nations.
The announcement: The HHS announcement targets all branded products without generic competition across all markets (including government markets like Medicare and Medicaid as well as the private insurance market).
- HHS has set the “MFN target price” as the “lowest price in an OECD country with a GDP per capita of at least 60% of the U.S. GDP per capita.” Additional details remain to be determined as to how pricing would be determined and how price controls would be enforced.
Previous attempt: A federal district court blocked the first Trump administration’s attempt to implement MFN price controls. The NAM filed an amicus brief in the case to protect manufacturers from unauthorized changes to Medicare rules established by statute.
A better way: “Manufacturers agree with President Trump that it is vital that Americans have affordable access to lifesaving treatments. That’s why the NAM has for years called on Congress to rein in [pharmacy benefit managers]. These powerful actors dictate what Americans pay at the pharmacy counter and drive rising health care costs for manufacturers and manufacturing workers alike,” NAM President and CEO Jay Timmons said in a statement following the president’s EO earlier this month.
- “Importing European-style price controls won’t help Americans access medicines or make them cheaper. Rather, these policies will dampen innovation and R&D, threaten patient access and empower bureaucrats abroad to undermine America’s health system.”