The latest announcement creates a rising priority that cannot be ignored.
President Trump’s July 31st letter regarding Most-Favored-Nation Prescription Drug Pricing (MFN) introduces several notable escalations and expansions:
- Moved from intent to enforcement – Sets a 60-day deadline on manufacturers to confirm their approach, broadens reach, and sets public expectation for action.
- Expansion of MFN is significant – no longer just about Part B – Outlines a significant expansion, beyond office or outpatient administered drugs, to include Medicaid and all new launches bringing in Part D, pharmacy-supplied medicines.
- All launch prices are on the table – New launch MFN pricing now covers Medicare, Medicaid, and commercial pricing.
- Direct-to-consumer (DTC) to bypass the middleman – Delivering savings to the patient sounds good in theory, but the devil is in the details. How will DTC be covered, and how will it be set against max out-of-pocket limits?
- Introduces potential pricing parity clauses or informal enforcement under trade and procurement tools, but leaves room for policy negotiation.
What are your considerations?
Understand MFN’s broad and aggressive scope: The 2025 MFN policy extends to Medicaid, new drugs, and commercial payers, forcing drug prices in the U.S. to match those in comparable developed countries. This could reduce revenue and disrupt existing pricing and U.S. rebate systems.
Global Strategy Adjustments:
- Pricing: Understand global launch pricing scenarios to maximise prices in ex-U.S. markets that would support pricing in the U.S. Develop scenarios in Europe, Canada, Japan, and other markets that may need upward pressure or confidential rebate arrangements to protect global revenues and U.S. market access.
- Launch sequencing: This may require prioritizing the U.S. or managing delayed launches in Organization for Economic Co-operation and Development (OECD) referenced countries.
Global and U.S. Strategy Adjustments
- Optimizing and investing in launch to drive momentum: Vital to overcome potential revenue losses in U.S. and potential launch delays in developed markets.
U.S. Strategy Adjustments
- Prepare for direct-to-consumer distribution channels: The MFN policy supports DTC purchases at MFN prices, bypassing intermediaries. This may affect out-of-pocket costs and insurance interplay, and companies should anticipate compliance and operational complexities in multi-channel access strategies.
- Rebate and contract model overhaul: MFN may compress rebates traditionally negotiated with PBMs and commercial insurers. Brands should reevaluate rebate strategies as overall list prices are pressured downward and rebate structures face legal and compliance challenges. These changes may also inadvertently encourage more 340B participation due to the altered incentives.
How Can Herspiegel Help?
This is a Decisive moment in your business or access planning. Conventional thinking may not suffice. Bring Rebel Thinking to the table, using our insights, understanding, and tools to understand your options. At Decisive Consulting, we have a deep knowledge of global and U.S. scenarios to make informed decisions within a 59-day deadline and beyond.
Evidence generation and roadmap creation: The traditional U.S. cash cow safety net appears to be coming undone. Therefore, robustly establishing the economic value of your asset to maximize its global commercial potential has never been more important. By combining FIECON’s renowned expertise in health economic modelling, with critical insights from our extensive pool of global payer advisors, we are uniquely positioned to generate the evidence and roadmaps required to support manufacturers’ success in this time of unprecedented change.
Direct-to-consumer: We’ve researched, analysed and built direct-to-consumer models for our clients. Based on an amalgamation of 20+ projects, we created a perspective piece titled Pharm to Table.
